Exide Industries : Newspaper Advertisements

A BusinessStandard

analysis found that

nvestigations

into

how

liquor issold inDelhi ledto

IDeputy

Chief

Minister

Manish Sisodiabeing raidedby

the

Central

Bureau

of

Investigation last week. Delhi's

lieutenantgovernortransferred

12stategovernment officers for

alleged graft.

In FY22, Delhi had changed

LIQUOR IS QUICKER

its excise policy, claiming it

In ~ Billion

would generate at least 15 per

cent more revenue than the

Top six alcohol revenue earners in FY22

receiptsofFY18 of ~6,309 crore.

(99)

Figures in brackets: Share of liquor in

In the first quarter of FY23, the

Delhi

government

claimed

total revenue collection (except POL)

liquor revenue had risen by

(99)

~1,484crorebutthiswasdisput-

(99)

ed in leaked data on sales that

(99)

(99)

noted that collections mightbe

justabout~570crorelowerthan

(80)

those of FY18.

415

195

245

170

161

88

Yet,

despite

whatever

changesoccurinthepolicysub-

UP

Karnataka

West Bengal

sequently,

the lessons

are

unlikely to be applied by other

Maharashtra

Telangana

Tamil Nadu

states. This isbecause the busi-

Note: Total revenue collection refers to states' own revenue

nessofsellingliquorissoattrac-

tive that no state is willing to

Soalso are the approvals for the

any brand, but each state fol-

heedlessonsfromothers.Many

sizeofthebottlesinwhichthose

lows different policies on the

walktheextramiletokeeptheir

products can be sold.

valid factory gate price. This is

policy including tax rates dis-

Post-Covid-19,stategovern- because states such as Goa

tinct from their neighbouring

ments such as Jharkhand and

and Karnataka give set offs for

states,creatingalogisticalnight-

neighbouringWestBengalwere

the inputs usedtomanufacture

mare for India's liquor manu-

among the first to have gone

liquor,

like

ethyl

alcohol.

facturers and distributors.

paperlessin their dealings with

"Where there are no input set

This is unlikely to change

the liquor trade. In fact, the

offs, the final price willbehigh-

anytime soon because liquor

detailed attention given to the

er," a

liquor

manufacturer

taxes have been - for decades

business shows that states can

pointed out.

- one of the major revenue

easily improve service delivery

Varying taxation rates on

earners

for

states

after

fortheircitizensinothersectors

sale of liquor, is only one differ-

automobile fuel. Being outside

if they were so inclined.

entiator. In Madhya Pradesh,

the purview of the sharing for-

Thatliquorbusinessisman- auditors found changes made

mula of the Goods and Service

aged by states is not uniquely

inthetendersforopeningshops

Tax, it is a source that is

Indian. Even in the US, in 22

had moved

the excise tax

zealously guarded. Revenues

statestherearemost-

In most

receipts

signifi-

from liquor vary from 99 per

ly government-run

cantly. The state

cent of state's total receipts

liquorshops.Whatis

states, these

recorded a 15.7per

(excluding the oil sector) for

interesting

is that

departments

cent rise in state

nine states - Delhi, Odisha,

their combined rev-

also employ the

excise

"mainly

Maharashtra, Telangana, and

enue of nearly $18

largest number

due to increase in

Uttar Pradeshto77per cent for

billionor~1.35trillion

of directly

the

amount

Madhya Pradesh.

is comparable to

recruited staff,

received

during

As a result, the experience

what Indian states

except for health

tenderingofliquor

of dealing with25stategovern-

earn from the trade:

and police

shops" (according

ments

and

eight

Union

~1 trillion annually

departments

totheController &

Territories where liquor is dis-

from the trade plus

Auditor General's

tributed in India is starkly vari-

some more including profits

report of 2019). Yet, there was

able. For instance, Jharkhand

from ancillary services such as

space

for

more correction.

has deployed an extremely effi-

licencefeesforshops,branding

Another audit report from the

cient information technology

fees, auction rights etc. This

samestatefoundthat794shops

backbone for the excise depart-

sum is roughly equivalent to

sellingcountryorforeignliquor

ment to respond to the liquor

what the Centre has promised

did not have a licence or regis-

companies. This does not nec-

to give them to build capital

tration. That is about one out of

essarily mean that input tax

assets in FY23.

every five shops in the state.

credits come promptly, a high-

Another example of how

Similarly,

each year, all

ranking official of aliquor com-

stateskeep their rules for liquor

brands of liquor a company

pany explained, "but licences

business distinct is evident in

plans to sell in a state have to

for offering a new line of wine

how they set the ex-distillery

be registered with the respec-

or hard liquor to the state citi-

price of liquor. Thoseshouldbe

tive excise departments, for a

zens are cleared within days".

thesame across the country for

price. InDelhi, for instance, the

the number of

public holidays

varies from 14

in Delhi to 34

in Odisha