Liquor prices in Delhi may go up by 50% as state govt mulls new excise policy

10-02-2021

The state government of Delhi is contemplating a new excise policy that could raise liquor prices in the state to an all-time high and change the way booze is sold in Delhi NCR by the government and privately owned shops. According to a report in Monaycontrol, the Aam Aadmi Party-led government could increase excise duty on liquor and change the format of retail sales. According to the report, an expert panel formed by the Delhi government has recommended a near 50% 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. 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 fee 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. Worth mentioning here is that the new guidelines could create a major problem for small and medium booze manufacturers as the panel has also recommended that Delhi government abolish rum and whisky brands below Rs 140 so that quality products are made available in the market. Also, the committee has recommended fewer dry days in Delhi so that consumers do not rush to neighbouring Noida and Gurugram to buy liquor. It also wants to lower the age of drinking to 21 and extend timings of restaurants and bars serving liquor. According to Moneycontrol, the committee has recommended to the state government that its annual excise revenue of Rs 4,513 crore from Indian liquor, foreign liquor and country liquor must rise to Rs 6,412 crore. To achieve this revenue liquor shops may be given targets which they have to achieve every month. But the target will be for state-owned shops only. Worth mentioning here is that, post the implementation of GST, states have only four sources of revenue collection- VAT on petroleum products, excise duty and VAT on liquor, stamp duty on real estate registration and duty on electricity. Now as the Centre's grant to Delhi has remained stagnant at Rs 325 crore since 2001-02, the state government has no other option than to generate a significant portion of its expenditure on its own.