Excise dept proposes new liquor licenses to cap fiscal deficit

Maharashtra's fiscal deficit may exceed ₹2 lakh crore, prompting government to explore new liquor licenses and welfare scheme reforms to boost revenue.

MUMBAI: As the state’s fiscal deficit is expected to cross ₹2 lakh crore, thanks to the many populist schemes launched by the Mahayuti government ahead of the Assembly elections, the state government has started pulling out all stops to mobilise resources to cap the shortfall.

Excise dept proposes new liquor licenses to cap fiscal deficit

For that purpose, on Tuesday, the excise department pitched the idea of issuing new liquor licences, allowing sale of wine in beer shops and departmental stores, and taking joint action with police against illicit liquor dens, while the finance department pitched a three-dimension plan of focusing on excise, transport and value added tax on diesel and petrol, to bolster revenue generation.

Soon after the swearing-in on December 5, deputy chief minister Ajit Pawar, who heads the finance and excise portfolios, had asked the departments to come up with ways to increase revenue. In response the finance department made presentation on Tuesday with the three-fold plan.

After the meeting, people in the know, however told HT that Pawar did not warm up to the idea of issuing liquor licenses, fearing political backlash.

An official from Mantralaya, requesting anonymity, said, “Most crucially, the finance department has recommended cleaning up the list of the beneficiaries in various welfare schemes, including Ladki Bahin, which would help the government save a huge fund, apart from reducing unwarranted expenditure.” Pruning the Ladki Bahin list was the government’s first move soon after it registered the big victory in numbers in the recent elections. According to the department’s officials, at least 20 per cent of 2.46 crore beneficiaries could be removed from the list.

Another official said, the excise department’s “reformist steps” would help increase revenue. “In its presentation the excise department recommended a policy to issue new licences to liquor shops. We have 1700 licences of foreign liquor and 3500 of country liquor issued in 1972. The deal for the transfer of liquor licenses according to the places of businesses is known to go up to ₹10 crore, though the government gets just ₹1 crore as transfer fee. If the new licences are issued on the lines the policy implemented in Uttar Pradesh, it could help generate revenue and reduce black marketing.”

In UP, CM Yogi Adityanath introduced the policy to issue licenses through a lottery system in 2016-17. Every year the number of licenses goes up by 2 per cent, which has helped the state revenue scale up to ₹47,000 crore from ₹15,000 crore in eight years.

While batting for opening up sale of liquor in departmental stores and sale of wine in beer shops, an official also underscored that action be taken against illegal import of the liquor from “Goa and other neighbouring states, where the duty at sales at airports is low”.

A statement issued by Ajit Pawar’s office read: “The DyCM has warned the departments that the inefficiency in plugging the leakages and evasion of taxes would not be tolerated. He has directed the machinery for the stricter steps to stop the illegal sales of liquor. The departments have been asked the undertake ‘result oriented’ steps for tax recovery and rise in the revenue generation.’

100-day makeover

After asking all the departments to roll out the 100-day transformation programme of the Mahayuti 2.0 government on December 9, chief minister Devendra Fadnavis reviewed the plan prepared by four departments -- housing, water resources, energy and agriculture on Tuesday. Each department presented its revamp plan in 100 days.

Earlier, in his meetings with the respective heads of departments, Fadnavis had asked them to chalk out a plan to bring more efficiency and transparency to reduce the footfall in Mantralaya, as well as steps that could be taken to get more funding from the central government.