Lucknow, March 1: The Akhilesh Yadav government has decided to renew the Mayawati administration’s liquor sale contract with slain baron Ponty Chadha’s company, helping the group recover from his murder and underscoring its clout across political parties.
The decision, taken at a cabinet meeting yesterday, will extend the Wave group’s virtual monopoly in the wholesale liquor business in Uttar Pradesh, which accounts for more than a quarter of the company’s business. Liquor sales in the state are estimated at Rs 20,000 crore.
“Chief minister Akhilesh Yadav will continue the (existing) excise policy. Consequently, the contract with Chadhas stands renewed. This is not being officially announced now as the Assembly session is under way,” a minister who attended the meeting said.
Sources said Ponty, killed along with younger brother Hardeep in Delhi last November when groups led by the siblings shot at each other, was close to leaders of Mayawati’s BSP and the ruling Samajwadi Party.
“There was not much time left for a new (liquor) policy. Also, the state doesn’t want to take a risk just a year before the 2014 general election,” said a state excise officer.
Sources said a fresh policy could open the door to new players but the entry of such unproven operators in the sensitive liquor business could spark law and order problems, a prospect Akhilesh would want to avoid ahead of next year’s Lok Sabha polls.
Another factor is the need to raise revenues. Sources said the Akhilesh government aimed to increase taxes from liquor to Rs 12,084 crore in 2013-14 against an estimated Rs 10,070 crore this year. The fee for Wave’s licence, which was to expire this month-end, has been hiked by Rs 2 lakh to Rs 30 lakh.
“It was a make-or-mar situation for the Chadhas after his death. His syndicate of liquor retail traders was under stress and faced disintegration. The renewal will help the group consolidate and recover from the setback,” a trade veteran in Lucknow said.
Chadha’s Wave group, with assets of over Rs 400 crore, is now being led by his 32-year-old son Manpreet, alias Monty, and the youth’s uncle Rajinder. Rajinder, another of the Chadha brothers, is the chairperson while Manpreet is vice-chairperson. The group also dominates liquor trade in Punjab and Haryana.
The government plans to allow liquor shops in malls, some of which are owned by Wave. To obtain the licence, a vendor has to pay Rs 20 lakh as fee, the sources said.
“In Lucknow alone, there are nine malls. Noida has four, Allahabad three, Kanpur two and Varanasi two. The liquor outlets in these malls are expected to jack up our revenues by a few hundred crores,” a state official said.