The Delhi Government’s Excise Policy has turned out to be an all-around smashing success by breaking all estimates and targets of revenue generation from the bidding process, sources in the Government said. The policy is set to take up excise revenue figures to `10,000 crore. The Government has already earned around `5,300 crore in the initial rounds where licences in 20 zones were awarded. Zone-wise revenue of around `265 crore is further expected to be received from the bidding of the remaining 12 zones.
The Delhi Government’s new Excise Policy 2021-22 aims at minimising corruption and providing fair competition in liquor trade, as seen in the recent tender bidding process.
“The 20 zones that have been awarded have already generated around `5,300 crore in revenue in the bidding process. The tender process forbids a bidder from bidding in more than two zones, which will bring in more players into the market, thus preventing instances of monopolisation. Under the previous excise policy regime, the yearly growth rates in revenue were limited to five to seven per cent. But under the new policy, a growth of around 35 per cent is expected and is well on track to be achieved,” they said.
A zone-wise revenue of around `265 crore is further expected to be received from the bidding of all the zones, which will total up to be around `8,800 crore in revenue after the entire bidding process is completed.
“It is important to note that the reserve bidding price was set at `221 crore and the tenders were awarded at an average premium of 20 per cent with the average bid price being `265 crore. The highest bid was auctioned for the New Delhi zone at a 45 per cent premium at `315 crore,” sources said.
Under the previous excise regime, a total of ` 6,358 crore were collected in the fiscal year 2019-2020 after collection of excise from Indian and foreign liquor, VAT collected from wholesale and retail sales, HCR excise, and retail licencing fees, they said.
“Additionally, rationalisation of liquor prices under the new policy will help plug counterfeit liquor that was earlier widespread due to high excise rates. The penetration of non-duty paid liquor from neighbouring States will also be rapidly plugged as liquor in neighbouring States will stop being cheaper than in Delhi, helping the Government recover large amounts of lost business,” they added.