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Posted: Saturday, 02 October 2021 00:25

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Blog: Delhi Government ushers in Mahatma Gandhi Jayanti in style

Oct 02: Next Chapter of the Delhi government’s latest Excise Policy on wine and alcohol unfolded yesterday, just in time to celebrate the 152nd birthday of Mahatma Gandhi, the beloved Father of the Nation, who abhorred alcohol so much that that he had Article 47 inserted in the Constitution, gifting the powers of determining the marketing policies and taxation to the States with the hope of encouraging and enforcing total Prohibition in the country, writes Subhash Arora

Born in Gujarat 152 years ago, on 2 October, 1869, the whole of India pays tribute to him for a life of sacrifices, frugality and getting us Freedom in 1947, on this day. The world acknowledges his policy of non-violence and the manner in which he brought the Brits to their knees and forced them to leave the country. It is also celebrated as a Dry Day throughout the country.

The Article 47 in The Constitution of India 1949, says, ‘It is the Duty of the State to raise the level of nutrition and the standard of living and to improve public health. The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.

I am not sure if Gandhi ji would have blessed the Delhi Government for collecting Rs. 9000 Cr even before a bottle of Alcobev could be sold under the new Policy 2021-22 could come into operation. He might even have blasted the government for blatantly breaking the Spirit of Article 47. He might have well rebuked the AAP for financing the free electricity, water and bus rides for women by collecting huge sums under the garb of Sin Tax. However, we will never know!!

Anyhow, the private vends- all 200 or so in Delhi shut shop on 30 September-the deadline to stop selling alcohol. While it is anyone’s guess how one could liquidate all the stocks when the policy specifically prohibits giving any discounts-unless the government implicitly decided to look the other way during the current period. Madhulika Bhattacharya who gave blood, sweat and tears to run her Retail store La Cave in a shopping mall in Delhi told delWine that she cried during the last 2 days. The tears were not so much because she had to buy her own wines at the official price (otherwise, she might have had to destroy the stocks) but because she had built the Retail store with a lot of passion and had put her heart and soul into it and could not see it brought down.

Madhulika might not be financially under too much stress as she has a successful Retail business in Mumbai and Bangalore where she has been expanding successfully but there are several smaller businesses who had to shut shop and clear up the stocks and go home. The shrewder ones have apparently formed a clique and even bid for the Vend cluster at over Rs. 250 Cr for each zone. But the emotional loss has been huge.

But the governments do not run on emotions- unless they have to garner votes from their vote banks which is the masses, which the government has done magnificently and deserves kudos. In the meanwhile, the market is agog with rumours and theories. There is a lot of speculation whether the prices would go up or down when the new stores come into existence on 17 November, 2021. The trade is amused as to how the new stores can be functional in 45 days. But the government believes in crossing the bridges when they come- It’s the C’est la Vie moment for the wine and alcohol industry- most professionals marvel at the dexterity with which the government has collected Rs. 8970 crores from the successful bidders from 32 zones in the city.

There have been news reports about shortages during the last one week. Most retailers were busy finishing their inventory and not interested in replenishing stocks. The government has assured the people about no shortages, but these are more of political statements. Even the government shops (all 600+ of them) are not keen to replenish stocks lest they are left with unsold stocks on 16 November- the D Day, if they buy additional stocks. The boozers have to live with the shortages (murmurs of Dry Diwali are getting louder by the day) unless they hop over to Gurgaon where the sharp Retailers would form a clique and start jacking up the prices from next week). Of course, the bootleggers are going to do a roaring business till the new policy kicks in with all its trappings.

But one has to commend the government for purely understanding the nuances of doing liquor business in Delhi. By increasing the label registration charges to Rs. 1 lakh per label while reducing the excise duty & VAT to merely 1%, the government AND removing the mandatory MRP, they will kill two birds with one stone. Assured of the revenue of Rs. 10000 Cr and inviting the big guys into the top echelon and increasing the L-1 fees to Rs. 5 Cr, they have assured of a windfall (excise duty revenues are expected to go up by 3500 Cr as compared to last year!) to the exchequer but will also introduce an element of competition that would keep the prices under check; the Retail would have to compete with Gurgaon and Noida too besides amongst the 32 zones. Although I have not come across any computer model to predict the prices but there are enough ifs and buts to take one beyond Diwali debating the future of the market, even if Diwali is not as cheerful for many

With the market forces working in a big way, the dust would settle post-Diwali and the Delhi-ites will hopefully have an excellent Christmas season with the importers and producers heaving a sigh of relief on their survival and would raise a glass of their favourite tipple and say Jai Ho to the government and the customers alike. I predict that more wine labels will enter the market and prices would see something of a downtrend.

Meanwhile, in deference to the Great Mahatma, I would not drink wine today -only water and say Happy Birthday to him.

Subhash Arora

 

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