AP’s excise policy: Auction system out

The government,however,decided not to increase the number of authorised retail shops from the current 6,596. In Scheduled (tribal) Areas,the new policy says,license will be granted only to local Scheduled Tribes as first preference and to others only if no ST trader comes forward.

The state government decided to do away with the auction system,introduced by the then YS Rajasekhara Reddy government in 2005,for allocation of retail liquor shop licenses as it resulted in formation of cartels and sale of liquor at exorbitant rates.

The so-called liquor syndicates — a nexus between traders,politicians,officials,police and journalists have been ruling the roost across the state and running countless unauthorised outlets,famously called “belt shops”,making liquor freely available even in remote villages.

The auction system became so notorious that in many districts licensee fee for a single shop even in a remote village commanded ridiculously-high Rs 3 crore in many cases. This helped the liquor syndicates thrive at the cost of the consumers but the government remained content as its coffers kept ringing.

The AP Anti-Corruption Bureau that launched a crackdown in December last exposed the many ugly facets of liquor trade in the state.

The ACB succeeded in establishing the “deep-rooted nexus” between liquor traders,politicians (of all hues),officials of the Excise Department,police as well as the so-called journalists.

Liquor has been one of the main money-spinners for the state government for the last few years. In the form of license fee (retail shops) alone,the state government earned Rs 6,990 crore for 2010-12,a ten-fold increase from a mere Rs 620 crore in 2005-06 when the auction system was introduced. Another Rs 500 crore is earned in the form of annual license fee from bars. The income from sale of liquor through the AP Beverages Corporation,the government arm that is into wholesale trade,is estimated to be around Rs 18,000 crore per annum.

With the liquor syndicates issue kicking up a storm,the state government constituted a Cabinet sub-committee headed by the Excise and Prohibition Minister to draft a new policy by studying those in force in states like Karnataka,Tamil Nadu,Maharashtra and Kerala.

Based on the recommendations of the Cabinet sub-committee,the new excise policy and The Andhra Pradesh Excise (Grant of licence of selling by shop and conditions of licence) Rules,2012 were announced.

The fixed license fee for 2013-14,under the new policy,will range from a minimum of Rs 32.50 lakh per shop in places with a population of up to 10,000 and a maximum of Rs 1.40 crore per shop in a city with a population of over 20 lakh.

“An intensive campaign to educate the public about the evil effects of drinking shall be taken up by the Prohibition & Excise Department,” Principal Secretary Asutosh Mishra said.