Liquor intake spiking in Punjab,revenue plunging: CAG

There is a huge gap between the amounts of liquor people are imbibing and what the govt is getting,says CAG.

Written by Agencies | Chandigarh | Published: March 28, 2012 6:11:48 pm

Increasing level of liquor consumption in Punjab is not yielding similar growth in excise collection to the exchequer,according to the report by Comptroller and Auditor General of India (CAG).

In its performance audit conducted on the functioning of Punjab’s excise department,the government auditor discovered earnings from excise duty had not been keeping pace with the steady increase in liquor consumption during 2005-06 till 2010-11.

CAG found that though the per capita consumption of liquor in Punjab shot up from 2.518 proof litre (PL) in 2005-06 to 4.009 PL in 2010-11,up by 59.2 per cent.

But,the excise revenue grew in the same period by 51.3 per cent from Rs 1,568.16 crore to Rs 2,373.07 crore in 2010-11.

Notably,consumption of liquor in Punjab saw astronomical rise during 2005-06 and 2010-11 as it jumped from 660 lakh PL to whopping 1173 lakh PL in 2010-11.

After finding disagreement between growth in revenue and liquor consumption,CAG said the state could have taken adequate and timely policy measures to boost revenue in the area of liquor sale.

Excise duty is an important source of income for Punjab,which is known for high consumption of liquor,as it constitutes about 12 per cent of state’s total revenue collection.

In its report,CAG further pulled up the Punjab’s excise department for not fixing any norm for production of spirit or liquor from grains,which prevented the state from earning additional revenue of Rs 73.01 crore.

The auditors after checking the records of distilleries for the period 2005-06 till 2008-09,found variation in the yield of spirit made out of grains.

It discovered that the yield of the spirit was less than the minimum benchmark of 61.2 PL of spirit from one quintal of grains as 4,482.48 lakh PL of spirit was produced from 78 lakh quintals against normative yield of 4,774.51 lakh PL.

Had the norms been adopted by the government,the department could have gained additional revenue of Rs 73.01 crore from the distilleries including Chandigarh Distilleries and Bottlers at Banur,Jagatjit Industries at Hamira and AB Sugar at Dasuya,it found.

Punjab Distillery Rules,1962 had fixed minimum norm of 36.61 PL of spirit to be extracted from one quintal of molasses. However,no norm has been fixed for production of spirit from grains.

The technical excise manual stipulates that 7.7 gallons of alcohol is to be obtained from one quintal of rice which is equivalent to 61.2 PL per quintal of rice.

The excise department also earned the wrath of CAG for not depositing education cess to the tune of Rs 166.79 crore to Education Development Fund.

It found that the department collected a sum of Rs 199.78 crore during 2005-06 till 2009-10 as education cess and just Rs 32.99 crore was transferred to Education development fund.

Punjab levies education cess ranging between Rs 2 to Rs 6 per PL (from April 2009) on sale of country liquor,IMFL and beer.

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