Tag Archives: Excise Policy

Punjab looking at different state excise policies, to shore up exchequer

The newly formed Punjab government of the Aam Aadmi Party (AAP) is contemplating upon allotting liquor vends through a tender system in its bid to shore up revenues from excise. However, the traders are not open to this idea and want continuation of draw of lots. In Delhi where AAP has been ruling the new excise policy has been welcomed not just by the industry, but also consumers. The Minister of Finance, Harpal Singh Cheema has directed officials to study excise policies of other states and plans to roll out the policy soon. Punjab is likely to pick up inputs from Delhi and other states before it announces a new excise policy for 2022-23 sometime in June to be effective from July 1. The excise department has already initiated informal discussions with the trade to understand their requirements while boosting the exchequer.

Like many states, Punjab’s major source of revenue is from excise. It has estimated the revenues for the current financial year at ₹7,002 crores, with an increase of 20% from ₹5,794 crores of 2020-21. According to media reports, the excise department has already achieved the revenue target for 2021-22.

In end March, the AAP government renewed the 2021-22 policy for a period of three months to those existing licensees who will give 1.75% excess revenue over minimum guaranteed revenue (MGR) of financial year 2021-22 for their respective groups and zones in order to maintain stability in the liquor trade. The minimum guaranteed revenue of groups and zones is estimated at ₹1,440.96 crores for this three month window and the revenue target is expected to be ₹1,910 crores.

The MGQ of Punjab made liquor (PML) called desi, Indian made foreign liquor (IMFL), beer and imported foreign liquor (IFL) of each group and zone has been increased by 10% of the corresponding first quarter of last financial year of the respective group and zone. Further, to allow retail licensees to lift liquor as per their requirement, the amount of additional fixed license fee has also been increased. The ratio of fixed and open quota of PML shall be 30:70 as was prevalent during financial year 2021-22.

It may be mentioned here that the government of Capt. Amarinder Singh had allotted vends through a draw of lots till 2019-20 and in the last two years it extended the trade licenses of those who guaranteed generating 12% excess revenue over the fixed minimum guaranteed revenue. It is learnt that the government is planning to increase the reserve price and license fee of liquor vends and also to increase the size of the group up to ₹20 crore, having 7 to 10 vends.

The government is on a mission mode to fill the coffers. The Finance Minister is on record stating that despite high liquor consumption in the state, it has been able to generate enough for the exchequer. “This is our mission now. We have to fill the coffers.” While lauding the Delhi excise policy, the Minister talked about basic difference between liquor consumers in Delhi and Punjab. “While Delhi consumes Indian Made Foreign Liquor (IMFL), Punjabis consume Punjab Medium Liquor (PML). We will have to work out our policy taking into consideration all these points.”

AAP national convenor and Delhi Chief Minister, Arvind Kejriwal had stated during the run up to the election that the AAP government would look at liquor and sand for generating funds.