How government ventured into the retail liquor business in Chhattisgarh

Initiative prevents state from losing three-fourth of excise revenue

In the first week of January, a liquor cartel gathered in the Chhattisgarh capital for a secret deal with a big plan on the card to dent a big blow to the state’s excise revenue.

The contractors held a meeting in one of the partners’ house and decided not to participate in the bid for 417 shops when put for auction. The shops were to be shifted to new locations following the apex court ruling that banned vending liquor within 500 meters of state and national highways.

The state government had identified the new location for the 417 shops. But the liquor contractors were not interested in running it as they felt it would not be viable as compared to shops along the highways. The plan was to trade illicit liquor in the area instant of officially running the shops.

The minutes of the meeting anyhow leaked to the excise officials. A strategy was planned to counter it. The state government soon started working on it; brought an ordinance and enacted a law to finally venture into the retail liquor business in Chhattisgarh.

“The estimated huge revenue loss was the main reason for taking the decision that from now the government would run the shops,” state’s excise minister Amar Agrawal told Business Standard. While the state’s excise revenue had been pegged at Rs 3,300 crore (in last fiscal), the 417 shops contributed Rs 2,200 crore.

The sale of illicit liquor in the jurisdiction of 417 shops would have reduced the state’s excise revenue to just Rs 1,200-1,300 crore. The state government acted promptly and took over the shops that it had been running from April 1. According to officials, the excise revenue was likely to cross Rs 4,000 crore in 2017-18 as the sale of illicit and spurious liquor would now be restricted.

The government is facing teething problem in running the Rs 10,000 crore business. Limited brands were only available in the shops, which are also running out of stock by evening. “Within a short time, things would be put in order,” Agrawal said.