NEWS | Delhi's new excise policy hopes to organise the liquor industry
/
With the new policy coming into force, all the 849 liquor vends in the capital city will be handed over to the private sector.
While the new Excise Policy of Delhi for 2021-22 will see the government completely leaving the ground of liquor retail to private players in Delhi, it is hopeful that the retail rates of liquor in the city will remain the lowest compared to other States because of the play of “competitive market forces” in the field.
The new policy opens the scope for a hike in retail prices due to the removal of caps on retail margins for retailers of both IMFL (Indian-manufacture foreign liquor) and FL (foreign liquor), and a marginal rise in wholesale prices. However, the government and the excise department of the State feel that the competitive spirit of the private players will help keep the rates under check even after handing over the liquor retail to the private sector.
With the new excise policy coming into force, all the 849 liquor vends in the capital city will be handed over to the private sector. The government expects more efficiency to come into the sector and thereby improving the customer experience at the retail level and thereby growth in excise revenue for the State.
While the excise department, in consultation with retailers, will fix the MRP of the products, retailers will have the liberty to offer concessions and discounts to consumers.
Given the impact of the increase in wholesale prices, the government expects a natural increase in MRP of products across brands in the range of 8 to 9 percent. However, despite that increase, the government is hopeful that the retail rates of liquor in the city will remain approximately in the range of the 2020-21 rates.
In a recent note, the excise commissioner noted, “The changes brought about in the new excise policy will need reasonable time to play out in the market. In the overall interests of consumers of Delhi, to prevent interstate smuggling, the MRP for 2021-22 should as far as possible be in the same range as prevailing in Delhi. This can be achieved if the currently prevailing amount of Excise Revenue, VAT and retail margin as per the rates for the year 2020-21 is continued at approximately the same level in the year 2021-22.”
