More liquor shops proposed to mop up more revenue for state

The excise department in Maharashtra has proposed allowing liquor manufacturers to open retail outlets in multiple districts, in an effort to increase revenue for the state. The department also suggests allowing the sale of mild liquor in beer shops and issuing more drinking permits. These proposals could generate additional revenue of up to ₹650 to ₹700 crore annually for the government.

Mumbai: In an effort to mop up more revenue for the state, the excise department has proposed to allow liquor manufacturers to open retail outlets in multiple districts or divisions from the current cap of one shop. Its reasoning is that the number of liquor shops per 100,000 population is much lower than shops in other states like UP, MP, Tamil Nadu and Andhra Pradesh, and that new shops have not been allotted since 1973. The presentation was made to finance minister Ajit Pawar recently when he directed the department to submit a plan for mobilisation of resources.

Maharashtra has over 18,000 licenced liquor shops, including restaurants and bars, and 90 liquor-manufacturing units (Satish Bate/HT PHOTO)

The department proposes to charge ₹50 lakh as non-refundable charges, which will help it collect an annual revenue of ₹200 crore. “Maharashtra has around 1,620 wine shops, which are transferred at whopping prices up to ₹25 crore,” said an excise officer. “This has generated an unwarranted lobby of licence holders; besides, the government gets only a paltry amount in such transfers. It should issue more licences to end this monopoly and at the same time earn revenue. In the past, however, the government has not paid heed to such proposals because of the obvious political repercussions.”

The department has also proposed to allow the sale of mild liquor in 5,775 beer shops since the alcoholic content in this liquor is as low as that of beer. “Revenue could increase multifold from the current ₹35 crore per year,” the department stated. It is also proposed to allow sealed bottles of country liquor to be sold in beer shops, as this would help reduce the consumption of illicit liquor.

Maharashtra has over 18,000 licenced liquor shops, including restaurants and bars, and 90 liquor-manufacturing units. 0f these, the department has proposed that 7,000 bars and restaurants be allowed to sell sealed liquor by paying ₹5 lakh as non-refundable fees. This will help the government mop up ₹350 to ₹400 crore annually.

Another proposal is to issue more three-monthly drinking permits in addition to the half a million permits issued on a yearly basis or for life. “This will help the government generate around ₹100 crore per annum,” the excise officer quoted above said. “Currently, consumption permits are issued on a daily, annual and lifelong basis, and there is room for permits on a monthly and three-monthly basis.”

The cash-strapped government, which presented the budget with a revenue deficit of ₹16,122 crore this March, is also worried about the expenditure rise of over ₹42,000 crore, which came in the supplementary demands in July. Development schemes and capital expenditure are expected to take a hit if the state government fails to generate more revenue.

“The government could consider these proposals after taking their political repercussions into account,” said an official from the finance department.