The Delhi government is contemplating raising excise duty on liquor and change the format of retail sales. An expert panel formed by the Delhi government has recommended a near 50 per cent increase in alcohol prices and raise its revenue from Indian liquor, foreign liquor and country liquor to nearly Rs 8,000 crore from the current earning of Rs 5,000 crore, reported Moneycontrol.
The moves could push liquor rates in Delhi to an all-time high and change the way booze is sold in Delhi NCR by the government and privately owned shops, the report says.
According to the report of the panel reviewed by Moneycontrol, the Delhi government currently earns excise revenue of Rs 46 crore from brand registration, Rs 4,507 crore from Indian liquor, Rs 240 crore from foreign liquor and Rs 210 crore from country liquor.
It also earns Rs 170 crore from licence free from restaurants and bars servings liquor, Rs 300 crore from export and permit fees and Rs 40 crores from retail licences. This totals up to Rs 5,068.70 crore, which the state government wants to increase to nearly Rs 8,000 crore.
However, these new guidelines could pose as a big problem for medium and small manufacturers. The committee has also recommended that Delhi government abolish rum and whisky brands below Rs 140 so that quality products are made available.
However, the panel has recommended fewer dry days in Delhi to checkmate the crowds from going to neighbouring Noida and Gurugram. It also wants to lower the age of drinking to 21 and extend timings of restaurants and bars serving liquor.
The committee has recommended to the state government that its annual excise of Rs 4,513 crore from Indian liquor, foreign liquor and country liquor must touch the figure of Rs 6,412 crore. This essentially means that liquor shops will now have a target and they need to fulfil it each month, the news report says. The target is meant mainly for state-owned vends.
The panel's report says that central grants to Delhi have remained stagnant at Rs 325 crore since 2001-02, even though Delhi’s contribution to the Central coffers has increased 10-fold in the same period (an estimated rise from Rs 9,000 crore to Rs 91,000 crore).
The tussle between implementing the 14th Finance Commission recommendations in Delhi and the 4th Delhi Finance Commission recommendations, has resulted in a cash crunch for Delhi.