In a big flip, state takes wine promotion scheme off ice

Going back on its own stand, the Eknath Shinde-led government on Thursday decided to revive the Wine Industrial Promotion Scheme (WIPS) for five years. The decision was announced in the state cabinet, keeping grape growers’ interest in mind

MUMBAI: Going back on its own stand, the Eknath Shinde-led government on Thursday decided to revive the Wine Industrial Promotion Scheme (WIPS) for five years. The decision was announced in the state cabinet, keeping grape growers’ interest in mind.

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The scheme was put on ice for nearly a year, after it was strongly opposed by senior ministers from the Bharatiya Janata Party (BJP) on grounds that it will project them in a poor light, as the party had opposed decisions to promote liquor and wine proposed by the previous Uddhav Thackeray-led Maharashtra Vikas Aghadi government. HT had reported the development on December 5, 2022.

The scheme was temporarily stalled to overcome the financial crunch in the wake of successive lockdowns imposed to contain Covid-19 pandemic in June 2020.

“The state cabinet smoothly cleared the proposal mooted by the state industries department,” confirmed a minister privy to the development on Thursday. “The BJP ministers, who had opposed the scheme maintained silence,” he added.

The proposal was first brought before the state cabinet on November 17, 2022. At the time ministers such as Sudhir Mungantiwar and Girish Mahajan from BJP vehemently opposed it, while deputy chief minister Devendra Fadnavis also supported them.

WIPS, an incentive scheme, was introduced to encourage the wine industry in the state in 2009. It is applicable for those who produce wine from grapes grown in Maharashtra.

Wineries are charged value added tax (VAT) of 20%, of which 16% is refunded as rebate under WIPS. In addition, a marginal excise duty -- ₹10 per bulk litre – was also levied on producers from January 1, 2022, as their two-decade long tax holiday came to an end on December 31, 2021.

On Thursday, the state cabinet not only allowed revival of the scheme but also approved refund of the rebate to the wineries who have been paying 20% VAT under the scheme for the last four years — 2020-21, 2021-22, 2022-23 and 2023-24, underlined a statement issued by the chief ministers’ office (CMO).

Welcoming the decision, Jagdish Holkar, president, All India Wine Producers Association, said: “The scheme’s revival will be a big relief for us, as it has been the bread and butter for the wine industry. It is part of a farmer-centric policy being promoted by the state government.”

Holkar also said it is a small industry in India, despite big players. France has 27,000 wineries, which is half of Maharashtra in terms of area and population, whereas in Maharashtra the number is still in two-digits. “It means there is a huge potential for growth,” he added.

Maharashtra has between 40 and 45 operational wineries. Of these, between 15 and 20 units directly market their products, while the rest are only manufacturers. The wine industry has a turnover of around ₹1,000 crore in India, of which 65% is in Maharashtra. Most wineries are located in Nashik — which produces around 80% of India’s wine, and is called the country’s wine capital — followed by Sangli, Pune, Solapur, Buldhana and Ahmednagar.