No new retail liquor shop in Maharashtra since 1974, CAG calls for fresh policy

Four years ago, the CAG came down heavily on the skewed retail liquor licensing policy of the Maharashtra government, which apart from revenue loss also leads to manufacturing or smuggling of spurious liquor that result in tragedies like the one on Thursday.

Four years ago, the Comptroller and Auditor General (CAG) came down heavily on the skewed retail liquor licensing policy of the Maharashtra government, which apart from revenue loss also leads to manufacturing or smuggling of spurious liquor that result in tragedies like the one on Thursday.

The CAG had suggested an overhaul of the policy so that safe liquor is available and to stop smuggling from the neighbouring states. In a report in March 2011 (HT is in possession), the CAG made asked the government to consider lifting the unofficial ban on issuing licences for Indian-made foreign liquor (IMFL) and country liquor shops, which the state has been following since 1974.

Citing an example, the auditing body said for Sindhudurg district, with a population of over 8.68 lakh (as per the 2001 census), there was only one IMFL shop. “As this district is next to Goa, where the price of alcoholic beverages is half that of Maharashtra, illegal movement of liquor into the district could not be ruled out as the traders enjoy a huge arbitrage advantage,” the report said.

Taking a dig at the government’s stand that issuing new retail licenxes was a “highly unpopular move which would meet resentment from all quarters,” the CAG observed, “The stand of the government is not tenable.”

Interestingly, the Bharatiya Janata Party (BJP)-led government added Chandrapur as the third ‘dry’ district of the state. This, despite the district had a per capita (annual consumption per head as per population) consumption of six litres of country liquor as against the state average of three litres. “How is the ban going to help the consumers except forcing them to turn to costly smuggled liquor or hooch,” asked a state excise official, requesting anonymity.

The report said the ban on issuing retail licences had not yielded commensurate revenue with the growth of population (Rs6,904 earned by the Andhra Pradesh government as against Rs340.47 crore by Maharashtra in 2010-11). Inaction to allot the defunct licences (65 IMFL and 322 country liquor) to new establishments deprived the government of revenue. Moreover, the shop coverage was not commensurate with the size and population of the districts, the report stated.

* Just 1 IMFL shop in Sindhudurg district

* Soon after Independence, the state government placed a complete ban on alcohol by introducing the Bombay Prohibition Act in 1949

* In 1953, following amendments, procurement of foreign (imported) liquor was allowed.

* In 1974, after the Raigad hooch tragedy, the government issued licences for production and distribution of potable liquor

* 1,613 IMFL and 3,975 retail (shops) country liquor licences were issued. Mumbai was issued 492 IMFL and 350 country liquor shop licences

* There is just one IMFL shop in Sindhudurg district

* Wardha, Gadchiroli and Chandrapur are the three dry districts

* No new retail licence has been issued since 1974.