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Why the liquor logjam in Punjab

May 14, 2020 05:58 AM

COURTESY HT MAY 14

Why the liquor logjam in Punjab
Gurpreet Singh Nibber

gurpreet.nibber@hindustantmes.com

Chandigarh : Punjab was among the first states to demand opening of liquor vends amid the lockdown to generate the much-needed revenue. The Centre’s approval came 10 days ago, but the state government is still struggling to get the shops opened with liquor contractors demanding a cut in licence fee besides other concessions. On Wednesday, chief minister Amarinder Singh tweaked the excise policy to compensate the liquor sellers. HT looks at the stand-off:

What is the issue?

Curfew was imposed in Punjab on March 23, bringing all businesses, including liquor sales, to a halt. As state excise is a major source of revenue, chief minister Amarinder Singh requested the Centre in mid-April to allow liquor sale. The Centre first refused and then permitted it. The state government announced to open vends from May 7 but the contractors refused, seeking clarity on renewed terms and conditions in the 2020-21 policy. Before it could decide anything, things took a turn for the worse as chief secretary Karan Avtar Singh had a face-off with cabinet ministers over changes in the policy with the latter blaming officers’ laxity for Rs 1,000-crore loss in revenue in three years.

What is the revenue loss?

The excise revenue shortfall is Rs 1,270 crore. Against the revenue target of Rs 5,675 crore, the department collected Rs 5,015 crore by March in 2019-20. In the current year, there is already a shortfall of 10% from Rs 6,200 crore target and could increase if the lockdown continues. Also, 870 of the 5,800 vends couldn’t be sold.

What are liquor contractors seeking?

Besides loss of business for 45 days due to the curfew, the traders are apprehending a dip in sales due to the continued lockdown, closure of hotels/restaurants and exodus of migrants, and therefore want relief. Amarjeet Singh Jeeti Sidhu, who has major stakes in liquor trade in Mohali and Rupnagar, said migrant labourers who spend a major portion of their daily income on liquor have left. “We do not know how to curtail the losses. The sale of beer has come to zero. It is to be seen how the government compensates us,” he said.

What is government offering?

Conceding to their demand, the government has agreed to compensate the contractors for 45 days by cutting down on quota for the period. A committee comprising cabinet ministers Manpreet Badal, Vijay Inder Singla and Sukhbinder Singh Sarkaria has been set up to hold talks with the contractors to address their grouse and give a report on imposing Covid cess. Another committee of three IAS officers - Anirudh Tiwari, A Venu Prasad and VP Singh – will assess the state’s revenue shortfall and losses incurred by liquor contractors during nine days of the 2019-20 financial year.

What does CM’s statement today mean?

After the CM’s announcements gave an indication the government wants to resolve the matter, liquor contractors have decided to open vends. They would, however, not be compensated for keeping vends shut after the period between May 6 and 12 despite being allowed to sell liquor. “All liquor vends should open, as government has decided to adjust the loss of the contractors,” said excise and taxation commissioner VP Singh

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