After a row between Cabinet ministers and Chief Secretary Karan Avtar Singh over giving relief to liquor contractors, the government has now found a middle path: do not cause a loss to state exchequer and also placate the contractors by reducing their Minimum Guarantee Quota (MCQ) for 55 days.
The government has now reduced the MCQ within municipal limits of Jalandhar, Ludhiana and Amritsar by 20 per cent from May 7 to June 30 and in the rest of the state by 10 per cent. The contractors were seeking relief from the government to compensate them for the lockdown period during which they could not sell liquor.
“By reducing MCQ at the rate of 20 per cent for 55 days, we will not have to pay the government the licence fee for the period of 11 days in MC limits of major cities. Similarly, for the rest of Punjab the contractors will not have to pay licence fee for 5.5 days,” a contractor told The Indian Express.
The state exchequer will lose Rs 72 crore in the fiscal year for providing relief to the contractors. But at the same time the government has levied Covid cess from Rs 2 to Rs 50 per bottle on various brands of liquor. This would help the government generate Rs 145 crore this fiscal year. The government will have a net profit of Rs 73 crore even after giving relief to the contractors.
The issue raised by the Cabinet ministers during the controversial meeting with the Chief Secretary has saved the state exchequer about Rs 400 crore as three options being considered by the government earlier were costing the state this much amount. This had led the ministers to question the Chief Secretary, who was earlier the Financial Commissioner (Taxation). The ministers had questioned as to why the contractors be given so much of relief at the cost of state exchequer.
The Chief Minister had then constituted a Group of Ministers comprising Manpreet Badal, Vijay Inder Singla, Sukhbinder Sarkaria and Sadhu Singh Dharamsot. The ministers held a series of meetings with the contractors and worked out a middle path. The contractors agreed.
Earlier, they had refused to open the vends in the state citing losses due to the lockdown period.
A minister said that the contractors also wanted the government to take action against the distilleries that had sold liquor during the lockdown period illegally and evaded excise duty. The government had ordered inspection of the stocks of liquor in the distilleries and mass transfers of Excise and Taxation staff. Action is in the offing against a few defaulters, sources said.
“This has also pacified the contractors. This was their first demand,” a minister said.
The liquor contractors in the state had refused to open vends in the state seeking compensation from the government. The government had then decided to tweak the excise policy and had suggested that the financial year could be extended for the contractors for 37 days of curfew in the state. This had led to protests by the ministers, especially Finance Minister who had said the state could not afford this profligacy. A confrontation between CS and ministers had ensued and the CM, who is also the excise minister, had to intervene personally to bury the hatchet.
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