August 1, 2022
Good morning. In today’s either/view, we discuss if the new liquor policy of Delhi has any merits. We also look at Tripura’s plans to provide electricity to villages through micro solar plants, among other news.
📰 FEATURE STORY
Delhi’s New Liquor Policy: Yay Or Nay?
According to estimations, Delhi might see a liquor shortage after news of new changes to its liquor policy has come to light. Officials say that Delhi will be reverting back to its old excise rules, which means that all those discounts the city’s been seeing on alcohol? Say goodbye to all of them.
This flip-flopping on rules set by the Aam Aadmi Party (AAP) government, while unexpected, was never something entirely out of the blue. The new rules were getting a lot of negative press and even threatened several jobs. Some even accused the government of bias in the way it was distributing licences. But was this new policy genuinely as bad as people made it out to be?
On 17 November 2021, the AAP government in Delhi implemented a new excise policy that transformed its liquor buying experience. In its official document, the government said its excise revenue was working at a suboptimal level. And there was enough space for the industry to develop, change and generally create a better environment for its customers.
This basically meant that, after all these years, private players would finally be given a chance to compete on a level playing field. As a result of the changes, all government-run liquor shops were shut down and replaced by private stores. The city was divided into 32 zones, and each zone had 27 liquor stores.
Since the new shops were all privately owned and the government made it such that they didn’t have to stick to the officially mandated MRP, the price of liquor got really competitive. During this, the government made 27% more revenue than it would have under the old policy.
As per reports, Delhi’s old liquor policy will take another month to truly set in, so the city’s got another four weeks of surprisingly cheap alcohol. So what were these guidelines? Well, there were more government-run liquor stores, more dry days – 21 to be exact – and no discounts on alcohol whatsoever. But at least there weren’t any CBI probes in the mix!
A huge reason for the government to call back their Excise Policy 2021-22 was the accusation of procedural lapses. The Delhi Lieutenant Governor VK Saxena has even recommended a CBI probe into the matter. According to him, the whole process involved “undue benefits to liquor licensees”, and it went all the way to the top.
VIEW: Profits and pretty places
According to the AAP government, the previous excise policy left loads of space for improvement. As it turns out, the city wasn’t doing as well as it should have been when it comes to revenue from alcohol sales. The new policy was supposed to change all of this. Not only was this expected to be better for state revenue, but it was also supposed to change the game for consumers in Delhi. Deputy CM Manish Sisodia said that the new policy would have stopped the rampant corruption happening via the old guidelines.
Sisodia even said that the new policy issued licences through open tenders, which immediately made the process more transparent. This was missing from the previous rules. And thus, the industry had to deal with loads of back alley transactions. According to him, the old regime earned the government a rough revenue of around ₹6,000 crores, while the new policy would push that number up to ₹9,500 crores in a year. This also makes sense as Delhi is the 28th most visited city in the world and the first in India. Most of those visitors happen to be foreign travellers making excise important.
The new policy also had customers in mind. One of the biggest changes was the insistence on liquor stores to provide a walk-in experience to consumers. This would let them access many more brands and have a fair choice of products. We’re talking about the whole air-conditioned, glass-door-ed shopping experience for the average liquor enthusiast. It also allowed microbreweries to thrive by letting consumers fill their bottles with draught beers. The establishments would also supply their beers to other bars and restaurants.
Finally, the new policy had several ideas about dealing with tax evasion. To make sure they don’t repeat their past mistakes, the excise department introduced Special Excise Adhesive Labels to check for any evasion. This comes with special inspection teams and a high-end lab to ensure the operation remains air-tight. The state was ready to make some money that would eventually reach the people.
COUNTERVIEW: Way too many losses
Several groups, including the BJP-led Centre, had a bunch of issues with the new policy. For one, shutting down the government-run shops resulted in many people losing their jobs, some of whom have worked in the industry for years. Reportedly, a total of 849 liquor stores were given their licences by the government. By the end of May, only 639 stores remained open. Last month alone, Delhi saw another 200 alcohol shops closing due to “financial losses”. As of June, active liquor stores had dropped to 464. Several people didn’t bother renewing their licences this year despite the 2-month extension.
According to people in the industry, the new rules also opened the market up to cutthroat capitalism. Since the policy allowed the stores to slash prices willy-nilly and not necessarily keep to government-mandated MRPs, new stores opted for every discount in the business. This was just to keep their product prices competitive. Eventually, it led to several losses for smaller business owners. From the conservative groups, the easy and cheap access to liquor was transforming Delhi into a city of drunks. It didn’t help that the number of dry days went down under the new policy as well – coming down from 21 days a year to 3.
There were also implementation issues. As mentioned earlier, the city was divided into 32 zones with 27 liquor stores each. The problem is that these zones were demarcated without looking into compatible and incompatible wards. Out of the 272 municipal wards in the capital, 100 did not conform to the new rules. This means business owners weren’t allowed to set up shop due to civic bodies invoking the Delhi Master Plan rules. According to the bodies, the shops were in violation of several pre-set rules as per city planning.
Then we come to the issue of licence distribution. The licences in the 32 zones were given out via an auction – the highest bidder got awarded the spot. Officials said that the average bidding price was settled at ₹265 crores. The tenders got an average premium of 20%, and the reserve bidding price was ₹221 crore. Despite being a more open and transparent method of distribution, the investment weighed heavily when tacked on with the ward issues, heavy discounts and new maintenance costs.
What’s your opinion on this?
(Only subscribers can participate in polls)
a) Delhi’s new Excise Policy 2021-22 is good for the capital.
b) Delhi’s new Excise Policy 2021-22 is not good for the capital.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
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For the Left:
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🇮🇳 STATE OF THE STATES
Solar power for 80 villages (Tripura) – On Saturday, the deputy chief minister of Tripura, Jishnu Dev Varma announced that the government is planning to provide electricity to 80 villages through micro solar plants, each costing ₹1 crore. Varma also said that the Tripura government had adopted modern systems of power distribution over the last four years without any additional burden on consumers.
Why it matters: The state government has set up a separate company to deal with the enhancement of the power generation infrastructure. Since 62% of Tripura is under forest cover, the government is also devising a plan to provide non-conventional sources of electricity to the interior regions. The Tripura State Electricity Corporation Ltd has 50 power sub-stations that have reduced transmission loss to end users.
DU set to assess student-teacher ratio issues (Delhi) – The Delhi University has set up a committee to look into the student-teacher ratio issues after its ranking slipped in the National Institutional Ranking Framework (NIRF). While the committee was set up to address this issue, its responsibility will not be limited to it. The head of the committee, Prakash Singh, said that the committee will also focus on class size, lab size, and infrastructure facilities, among other issues.
Why this matters: DU slipped to the 13th spot in the rankings this year. The formation of this committee will ensure better facilities for students as it is dedicated to making resources easily available to students. Improving the student-teacher ratio will accelerate this process.
Reshuffle of state cabinet (West Bengal) – After Partha Chatterjee was arrested for allegedly running a multi-crore school staff recruitment scam, the Trinamool Congress has decided to rejig the state cabinet before Independence Day. This will be done in an attempt to revamp the image of the party post the jobs scam probe.
Why it matters: Chatterjee was virtually the number two of the government and the TMC. He was allotted to five important ministries which furthers the damage to the reputation of the party. Chief Minister Mamata Banerjee mentioned on Thursday that the reshuffling of the cabinet will take place shortly while some senior members of the party claimed that this move was being planned before the arrest of Chatterjee.
ED search Sanjay Raut’s residence (Maharashtra) – On Sunday, the Enforcement Directorate (ED) carried out a search related to a money laundering case against Shiv Sena MP, Sanjay Raut. It was reported that the ED, along with Central Industrial Security Force (CISF) officials searched the MP’s residence after he skipped the summons of the ED twice. He was to be questioned by the Directorate in connection with the re-development of a ‘chawl’ in Mumbai and related transactions.
Why it matters: Sanjay Raut ignored the summons of the ED and denied the wrongdoing he was accused of. He claimed that this was a part of a ‘political vendetta’ bestowed upon him by the Narendra Modi government as he belongs to the Uddhav Thackeray camp, which refused the BJP’s move to form a government in Maharashtra. The MP stated that the evidence is false and he will not leave Shiv Sena even if he dies.
Delay in Academic Credits Bank (Karnataka) – Karnataka’s institutions have yet to register with the Academic Bank of Credits (ABC) since the state is still awaiting clarifications. However, the vice president of the Karnataka State Higher Education Council, Thimme Gowda B, has assured students that this delay will not affect their degrees. He also added that the credits could be added to the bank at any point in time by the awarding institutions.
Why it matters: Under the new National Education Policy, the University Grants Commissions (UGC) required higher education institutions of states to upload student credit data for the academic year 2021-22. This was in line with the implementation of the Academic Bank of Credits (ABC) which plans to digitally store academic credits to allow students to choose their own learning paths.
🔢 KEY NUMBER
23% – A survey conducted by the National Statistical Office revealed that the proportion of unmarried youth (between 15 and 29 years) has increased to 23% as of 2019. This is a huge jump from the recorded 17.2% of unmarried youth in 2011.