Proposal to allow 2,160 new liquor shops put on hold after Shiv Sena objects

Maharashtra's excise department proposed 2,160 new liquor shops to boost revenue, facing opposition from Shiv Sena ministers; proposal now on hold.

MUMBAI: In a bid to augment revenue, the state excise department headed by deputy chief minister Ajit Pawar on Tuesday proposed that 2,160 new liquor shops be allowed in Maharashtra. The recommendation was part of the cabinet proposal to increase the excise duty on liquor—the latter was passed on Tuesday, leading to a huge hike in liquor prices.

Proposal to allow 2,160 new liquor shops put on hold after Shiv Sena objects

The bid to increase liquor shops in the state, however, was immediately opposed by Shiv Sena ministers, citing the possibility of a backlash from the people and social activists. Ajit then offered to reduce the number to 360 shops but was still opposed by Sena ministers, following which chief minister Devendra Fadnavis put the proposal on hold.

The state government committee, set up in January and headed by Valsa Nair, had proposed one licence per district to each of the 60 distilleries in the state. The liquor-manufacturing companies currently get a licence for one liquor shop, and since new licences have not been issued for over five decades, the excise department opted for the indirect route of issuing new licences to liquor-manufacturing units only.

When the proposal came up for discussion, tourism minister and Shiv Sena leader Shambhuraj Desai, who was excise minister in the previous government, strongly opposed it. Other Sena ministers joined him, pointing out that a similar proposal brought in by Desai during the Eknath Shinde government’s tenure, was opposed by Ajit Pawar’s party which cited the possibility of a public backlash.

Currently, there are 1,700 liquor licences for Indian Made Foreign Liquor (IMFL) and over 3,500 for country liquor in existence in Maharashtra. Owing to opposition from social activists and citizens, the government has not issued new licences since 1972. “The excise department has been citing the licence auction system practised in other states, including Uttar Pradesh to back up its proposal,” said a senior minister. “However, the state government, fearing a public backlash, has been deferring it. This time, therefore, the department suggested issuing licences only to liquor-manufacturing units.”

Following the Sena’s opposition, Ajit Pawar sought to change the proposal to offering one shop licence for each of the six revenue divisions of the state. This would mean about 360 new liquor shops. Although this was also opposed by Sena ministers, the proposal has not been cancelled but merely put on hold.

The Valsa Nair committee has also recommended a slew of other measures to boost the liquor-manufacturing and consumption sector. It has recommended the adoption of several ‘ease of doing business’ measures such as doing away with stringent provisions such as the mandatory approval of a superintendent-rank officer for beer dispensers installed in permit rooms. It has recommended the promotion of wine, which right now sells a meagre 10 million litres per year in the total annual liquor sales of over 1,110 million litres.

The committee has also recommended proper coordination between the excise and goods & services tax departments to plug the evasion of value-added tax (VAT). “The GST department levies 10% VAT on the sale of liquor in permit rooms,” said an excise department official. “Our department claims that the sales figures of permit rooms are underdeclared, leading to a VAT loss of 50% or ₹600 crore per year. The committee has recommended better coordination and sharing of the data of sales with the excise department to plug the evasion of VAT by permit rooms.”