Delhi’s new liquor policy: What is it and why it is facing opposition? Here’s everything you need to know

The policy suggests closure of all (around 400) government-owned liquor vends as they were pushing inferior brands from these shops

By Deepak Kumar

The Delhi government has made some bold changes in its new excise policy regime. And those changes have set many tongues wagging, especially in opposition to those changes. While some of the opposing voices are from political parties, and were more out of political compulsion than any genuine concerns, some were also from the liquor traders.

It is given that when the government gives up the policy of status quo and goes for bold changes, there would be uncertainties and fear among different stakeholders. And while we acknowledge those concerns, we would reiterate that the New Excise Policy is going to improve choices and accessibility for consumers, as well as expand the liquor trading market in Delhi. This will ultimately help all the stakeholders – liquor traders, manufactures and the government – in the long run.

But before I go further, let me run you through some of the major changes suggested by a committee under the leadership of Deputy Chief Minister Manish Sisodia (other members of the committee included ministers Kailash Gehlot and Satyendra Jain):

1. The policy suggests closure of all (around 400) government-owned liquor vends as they were pushing inferior brands from these shops. Instead these vends will be given to private players.

2. The permissible drinking age has been lowered from 21 to 18 years as followed by other states

3. The number of dry days has been reduced from 21 to three. The government is aware of the fact that during additional dry days people are forced to buy liquor from neighbouring states (Haryana and Uttar Pradesh) leading to revenue loss for Delhi.

4. Delhi will be divided into nine zones to ensure equitable distribution of liquor vends across Delhi. The committee has also recommended raising the number of existing liquor vends from 720 to 916.

5. It has also been recommended to extend the timings of opening of bars and pubs till 3 am, relax the regulations of issuing bar licences

6. Stricter conditions have been recommended for issuance of L1 Licences. These licences will be given to only those entities which have a wholesale distribution experience of five years in any one state of India and have an annual turnover of Rs. 250 crore each in the past three years.

As can be seen from the changes, the objective of the policy is to make available quality liquor for consumers across Delhi and ensure ease of doing business for liquor distributors and bars. Of course, increased revenue realisation is also one of the main drivers for these policies.

Political opposition

The opposition from Congress and BJP has been mainly on so-called moral and ethical grounds. They have said that lowering drinking ages and increasing the number of vends would only lead to higher crime and disrupt peace and harmony of the society.

Such concerns are unfounded. The Delhi government’s excise policy is on the lines of Haryana and Uttar Pradesh, where there are BJP governments, or Punjab, where the Congress rules at the moment.

Some commentators and citizens have raised concerns over increasing the number of liquor vends. These fears are also baseless. Let me prove this by quoting some numbers.

The committee has recommended to raise the number of existing 720 liquor vends in Delhi to 916 for its population of 1.90 crores. Compare this to other metros — Mumbai has 1,190 vends against a population of 1.23 crores and Bangalore has 1,794 vends across a population of 1.93 crores.

Delhi still has fewer number of liquor vends vis-a-vis its population.

Opposition from traders’ association

The Delhi Liquor Traders Association’s main objection is against strict conditions for issuance of L1 licences. Their fear is that those conditions would favour a few large players at the cost of smaller ones.

This is not true as there are more than two dozen players in and around Delhi who fit the five-year experience and Rs 250 crore annual turnover criteria.

The reason behind these objections is to push cheap brands, manufactured from neighbouring states by the local syndicates, in Delhi. The government, on the other hand, is committed to make available quality liquor brands to consumers.

This has been acknowledged by many quarters including the International Spirits and Wines Association of India (ISWAI), which has congratulated the Delhi government for a policy striving to achieve a cleansing of the Alcohol Trade in Delhi.

The new liquor policy of the Delhi government is a win-win for all stakeholders – consumers, manufacturers, distributors, and the vendors.

The Delhi government also stands to gain by this policy as the same would result in an estimated increase of Rs 2,500 crore in excise collection.

(The author is a Delhi based independent writer. Views expressed are personal and do not reflect the official position or policy of Financial Express Online.)