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New excise policy set to be cleared, with minor tweaks



Major changes include slashing the legal drinking age from 25 to 21, getting the state out of the retail alcohol business, overhauling a labyrinthine tax system, reducing the number of dry days in a year from 21 to 3, and improving spread and service.

Lieutenant Governor Anil Baijal has cleared the Delhi Excise Policy, 2021, and the draft Delhi Excise (Amendment) Rules, 2021, with some suggested tweaks, paving the way for a range of sweeping reforms envisaged by the Delhi government to boost the city’s revenue, crack down on the liquor mafia, and improve user experience.

Major changes include slashing the legal drinking age from 25 to 21, getting the state out of the retail alcohol business, overhauling a labyrinthine tax system, reducing the number of dry days in a year from 21 to 3, and improving spread and service. 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.

Documents seen by HT show that the Delhi government’s council of ministers, led by chief minister Arvind Kejriwal, cleared the suggestions given by the L-G in a Cabinet meeting last Friday.

Senior government officials privy to the developments said that Baijal recently discussed the draft excise policy and rules with Kejriwal and deputy chief minister Manish Sisodia. While approving the policy, he gave seven suggestions.

However, the decision to reduce the legal drinking age to 21 is going to take longer because it requires the Delhi assembly to convene and pass the amendment to the Delhi Excise Act, officials said.

One of the amendments, now approved by the Cabinet, included strengthening clauses aimed at preventing brand pushing and cartelisation by tightening checks not just on wholesalers, but also on retailers.

“The retail licensee holder should not have any manufacturing facilities/distilleries/breweries/wineries anywhere in the country or abroad either directly or through any sister concerns/related entities. For this purpose, sister concerns/related entities shall mean that the entities should not have common proprietor or partners or directors. Majority ownership (51% or more) of the proprietorship or partnership or company should not lie with the same person in all the entities. The entities should not have a holding subsidiary relationship or are not subsidiaries of the same holding company,” said the Cabinet decision dated May 21. HT has seen a copy of the note on this.

On April 6, an HT investigation revealed that several liquor stores in Delhi were controlled by a small group of people through proxy ownership that, experts said, led to cartelisation and suppression of State revenue. The government’s new policy aims to end that.

Some of the other amendments include lowering the minimum carpet area of “super premium vends” to 2,500 sq ft from 5,000 sq ft; lowering the minimum stock of these super premium vends from 100 imported liqour brands (including wines) to 50; renewing retail licenses subject to timely payment of license fee and compliance to the rules;

The policy, with the amendments approved by the Cabinet, has been again sent to the L-G for his final approval. Once that is granted, the process of notifying the draft excise rules and the policy will be initiated, the official cited above said.

A liquor industry executive in Delhi said the changes proposed by the L-G were “nominal”, and that the essence of the new policy remains unchanged. “The latest amendments were done with some stakeholders requesting for changes. Overall, the policy is fundamentally the same,” the trader said, asking not to be named.

The policy was first approved by the Delhi government on March 22, after which amendments were approved on April 15 and May 21. It aims at providing a more equitable distribution of stores, scraps several antiquated laws regulating service in restaurants.

The policy divides the Capital in 32 zones for retail sale of liquor, and ends the system of collecting licence fees separately from each store. Instead, the licence fee is charged upfront, and retailers are free to decide the selling prices in a competitive environment, rather than an MRP being mandated by the government. Each zone will have at least 27 liquor vends — all of which will go to one successful bidder.

Anurag Katriar, president of the National Restaurant Association of India (NRAI) said, “We are extremely happy that pursuant to the earlier decision made by the Delhi government, the L-G has also given his ascent to the new excise policy for Delhi now. This is historic and will significantly change the F&B landscape of Delhi..”

Neither the Delhi government nor the L-G office commented on the matter on Wednesday.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) also welcomed the move.“..We urged the government to take steps to ensure monopolies are not created in retail space. We are glad to note the government has inserted measures to prevent this.

Delhi BJP spokesperson Praveen Shankar Kapoor, however, questioned the government’s priorities. “It is really sad that when the entire country is trying to fight Covid and governments are busy arranging vaccines, Delhi’s Arvind Kejriwal government’s priority is approving liquor policy.”

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