The Telegraph
Wednesday , January 11 , 2017

State govt likely to uncork liquor retail plan

- Excise mulls running booze stores to shore up revenue, to seek cabinet nod

A liquor shop on Main Road in Ranchi on Tuesday. Picture by Prashant Mitra

Ranchi, Jan. 10: The state government is thinking of directly running retail liquor outlets from the next financial year to shore up excise revenue that is likely to fall short of the Rs 1,500 crore target set for 2016-17.

Senior officials of the state excise and prohibition department admitted an action plan was in the final stages and would be sent to the state cabinet for approval soon.

The state government is already running Jharkhand State Beverage Corporation that acts as a wholesaler. Retailers are selected through a process of open bidding.

According to excise and prohibition department secretary Avinash Kumar, there are over 1,400 licensed liquor retail outlets across Jharkhand and the revenue target for the current fiscal was Rs 1,500 crore.

But, the actual figure till March 31 was likely to be around Rs 1,100 crore, a shortfall of Rs 400 crore, prompting the department to consider ways of improving revenues in the next fiscal.

"Directly running the liquor retail outlets is one such measure," admitted Kumar. "We are also considering improving the end-to-end monitoring of the liquor business and stepping up surprise checks at liquor outlets, dhabas, restaurants and hotels," he said.

The beverage corporation notwithstanding, liquor retailers are pretty much a law unto themselves in Jharkhand, selling IMFL and other brands at prices marked up by at least 10 per cent to 20 per cent over the MRP. Very few of them provide receipts.

Payments were by cash although some shops did set up POS machines to accept card payments in the wake of the demonetisation exercise. But, even those shops had stopped and were back to cash-only sales, claimed regular customers.

According to excise department sources, the beverage corporation buys liquor from manufacturers and sells it to retailers at a profit of 5 per cent. The retailers, in turn, sell the liquor at a 15 per cent profit margin, a price band that is fixed by the beverage corporation.

The monthly quota, as fixed by the beverage corporation, ranges from 350 boxes to 500 boxes in case of IMFL. A retailer will have to forfeit its security deposit if it does not pick up its quota of liquor.

Will the state government's proposed move to get into liquor retailing improve its revenue earnings and bring about some order in the business?

Jharkhand Retail Wine Association executive body member Ajay Sahu doesn't think so going by the experience in neighbouring Bihar that has imposed total prohibition, and some other states.

"The monthly rent of a liquor shop ranges from Rs 50,000 to Rs 1 lakh. Has Jharkhand beverage corporation identified places where it would be running the outlets? Does it have the requisite manpower?" said Sahu.

He cited neighbouring Bihar where sale, purchase and consumption of liquor was banned only after the Nitish Kumar government, initially planning to open 600 shops, failed to open a single one after trying for three months.

"A chaotic situation prevails in Tamil Nadu where liquor outlets are being run directly by the state government. In Karnataka, barely 20 per cent of the liquor shops are being run by the state government," he added.

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