In June 2021, the Kejriwal-led Delhi Government divided Delhi into 21 excise zones under the Excise Policy 2021-22. As per the policy framework, there would be 849 outlets selling alcohol in the national capital, including five super-premium vendors.

Deputy chief minister Manish Sisodia, who is also Delhi’s excise minister, is likely to reveal these details in press conference scheduled at 2pm on Wednesday. This will also mark the departure of the Delhi government from the retail business of liquor in the city as the entire segment will be privatised as mandated under the latest Delhi Excise Policy, 2021.

The last set of licenses were allotted in September, and all new licensees were asked to begin operations from November 17. The government earned Rs. 8,900 crores through the bidding process. Notably, it was 26.7% higher than the reserved price for the licenses, as reported by Hindustan Times. Under the new Delhi Excise Policy, the government will no longer sell liquor in the city, and the entire segment will be handled by private entities. 

Deputy Chief Minister Manish Sisodia said the government has received 215 bids for retail vends in 32 zones across the city. (File Photo)

The allotment process had started in August itself. Twenty zones were allotted in August, while the remaining were allotted in September. The reserved price was Rs. 7,041 crores. According to a report in Hindustan Times, Zone 28 that covers areas including Dwarka-A, Deoli, Bhajanpura, Kardampuri and Quraish Nagar won the highest bid at Rs. 357 crores. In terms of highest profit, Zone 32 that covers the Airport zone topped the list with Rs. 235 crore. The reserved price for the same was Rs. 105 crore.

The government’s earnings from these vendors do not stop at the license. The government would earn approx Rs. 650 crores from excise duty, import fees, VAT and other license fees. Apart from that, the government is expecting to earn another Rs. 900 to Rs. 1,000 crore from licensing of new brands, distributor licenses and more.

This will mark a new record for the Capital, and push annual earnings growth rate from the current 5-7% to over 30% -- highlighting that the new excise policy, which aims to reform the city’s liquor business by improving user experience, cleaning up the liquor mafia and eradicating pilferage, is making an impact within two months of being adopted.

As per the government data, the Delhi government has been earning up to Rs. 5,500 crores per annum from the liquor sector. The new excise policy pushed the revenue up by around 40%. Interestingly, the retailers would be free to decide the selling price of the liquor, and the government would not have a say in the MRP. Under the new policy, business hours have been fixed as from 10am to 10pm, while those at the airport may open round-the-clock.

The five super-premium liquor outlets would not have iron grills. The buyers would be able to browse the high-end products and make the purchase.

The newly appointed retail licensees will have to build bigger and modern liquor vends from November 17. Customers will get the facility to walk in and choose their preferred liquor brands.

The policy, among other things, envisages five new super-premium liquor shops for high-value products. It includes a rule that any liquor shop in the city should be at least 500 square feet in size. It gets rid of the iron grilles at the front of most liquor vends in the Capital, and allows buyers to browse and purchase the brands of their choice. For this, the shops have to be spacious, well lit and air-conditioned to allow customers a walk-in experience and must be under camera surveillance. Shop owners will have to ensure that liquor sale and pick-up takes place properly inside the shop premises. It also allows home delivery of liquor in the Capital through websites and apps.

No reduction of VAT on fuel

Despite more-than-expected income from the liquor license, the Delhi government had not reduced Value Added Tax on petrol and diesel so far. Notably, the central government reduced excise duty on the fuel a day before Diwali. The BJP-ruled states also followed suit and reduced VAT to give additional relief. However, among the non-BJP ruled states, only Odisha reduced VAT, and the rest of the states, including Delhi, Rajasthan, Punjab etc., did not take any steps to provide relief to residents from fuel prices.

References:

hindustantimes.com
indianexpress.com - Express News Service
opindia.com - OpIndia Staff