UP set to retain excise policy benefical to Chadha Group

Late Ponty Chadha's political clout ran across political spectrum and ideologies

The Akhilesh Yadav-led Uttar Pradesh government is likely to retain its existing excise policy, a move likely to benefit the Ponty Chadha Group — enjoying virtual monopoly over wholesale liquor trade in UP.

The state is also targetting a 20 per cent hike in excise duty generation to Rs 12,084 crore during the financial year 2013-14. In the current financial year, the state was eyeing excise revenue of Rs 10,070 crore against Rs 8,139 crore during the financial year 2011-12.

While there had been no official word on retaining the excise policy, as the Vidhan Sabha session is underway, sources have confirmed it would be retained.

On the sidelines of the post Budget news conference here recently, Chief Minister Akhilesh Yadav had told Business Standard that the state excise policy would be announced soon.

“It would be announced soon…most probably by the end of the month. We have already increased the excise duty target by 20 per cent,” he said, without giving details on the the policy draft.

“There is hardly any time left for the implementation of a new policy. Even the lottery system would require two months’ time,” a Lucknow-based prominent liquor traders’ association member said, asking not to be named.

The liquor retailers had also asked for the renewal of their their licences, while demanding the government conducted lottery for awarding wholesale liquor licences. The government is set to maintain status quo, as the existing policy had led to almost 20 per cent increase in excise revenue in the past years.

The consolidated annual liquor business in UP, spanning foreign and country made liquor, is estimated at Rs 14,000 crore. Barring some districts, such as Lucknow, Allahabad and Varanasi, which are helmed by the Deep Group, the Ponty Chadha Group ruled the roost in other regions.

There is rampant trade of illicit liquor and smuggling in UP, that robs the state of excise revenue by 20 per cent annually. This is also being plugged by the state.

There are around 17,000 retail liquor shops in UP, of which 40 per cent were controlled by the group led by late Ponty Chadha, which also exclusively took the delivery of liquor from 54 odd distilleries in the state for retailing.

Since the wholesale contract of Ponty Chadha is due to expire on March 31 and owing to the Group’s proximity with the previous regime, it was believed the incumbent dispensation could revert to the erstwhile lottery system and selection of several wholesale suppliers.

Chadha’s political clout could be gauged from the fact that during the previous Mayawati regime, a special Meerut zone was created comprising adjoining districts wherein Ponty Chadha Group was awarded not only wholesale, but retail contract too.

Liquor baron Ponty Chadha and his younger brother, Harjeet, were killed in a shootout at a Delhi farmhouse in November last and the case is under investigation.