Uttar Pradesh excise policy knocks out liquor cartels, smuggling syndicates

Yogi Adityanath government eyeing Rs 204 billion in excise revenue in FY19

The new excise policy of the Yogi Adityanath government seeks to hit the liquor cartels operating in Uttar Pradesh, especially Western UP districts and curb rampant liquor smuggling from neighbouring states.

UP excise policy 2018-19, which was approved by the Adityanath cabinet here last night, has ended the monopoly of groups or traders in organised liquor retailing, which is estimated to fetch the government over Rs 204 billion in excise revenue next fiscal.

“The new excise policy is aimed at hitting the crony capitalism and monopoly in liquor trade and introducing transparency,” UP health minister and government spokesperson Siddharth Nath Singh told the media after the cabinet meeting.

The new excise policy has dismantled the special Meerut excise zone, which was created during the Mayawati regime (2007-12) comprising Meerut, Saharanpur, Moradabad and Bareilly divisions purportedly to benefit liquor baron late Ponty Chadha’s Wave Group, which virtually monopolised the state retail liquor trade.

Wave Group firms were awarded not only wholesale, but retail contracts as well in Meerut zone. Singh claimed the 2008-09 policy was framed to benefit a few people even as he himself refrained to name any person or group.

Meanwhile, the bidding process for liquor retail shops would now be conducted online and traders would individually bid for each retail outlet. An individual could be awarded maximum two liquor shops in one district after bidding, so as to preempt monopoly build up.

To encourage digital payments, the liquor retailers would provide facilities for electronic payments through debit/credit cards, e-wallets etc. There are about 18,000 retail liquor shops in UP.

The policy further seeks to curb rampant illegal liquor trade and smuggling, which results in excise revenue loss to exchequer. The government has scrapped the system of using holograms on bottles and instead introduced ‘trace and track’ system for real time monitoring of goods.

During the current fiscal, the state excise revenue is estimated to touch Rs 157.30 billion and the government has estimated its coffers would swell by almost 30% or Rs 46.72 billion in 2018-19, thus pegging the excise kitty at Rs 204.02 billion in the next financial year.

Besides, the government would take steps to restrict sale of goods near schools and religious places, while also regulating its timings to lessen the sale hours.

To incentivise liquor retailers, the government has announced to give preference in the renewal of liquor retail license for 2019-20 if they exceeded their Minimum Guarantee Quota (MGQ) by 6%, 40% and 30% for country liquor, foreign liquor and beer respectively during 2018-19.

Liquor smuggling is quite rampant in western UP due to higher excise duty in the state compared to the neighbouring states, resulting in steeper retail liquor prices. Now, the liquor prices are likely to fall to minimise retail price differential.