Rajasthan: No high in selling liquor due to falling profits

Jaipur: There was a time when Rajasthan businessmen desperately tried to get a liquor shop licence for lucrative income. After petrol pump and gas agencies, it was the most sought-after and profitable investment. However, the charm of a liquor licence seems to be fading fast. The excise revenue has been constantly falling over the past two financial years. Adding to the woes now is lack of interest among businesmen for liquor license for the next financial year. For country liquor and composite shops, the decline in renewal of licence is 22 per cent. Not a single hotel and bar has renewed its licence out of 812. Applications for bhang licences have dropped drastically by 50 per cent, the only relief, however, has come in the form of IMFL where only 25 out of 1000 licence holders did not apply for renewal. This is in sharp contrast to the previous years when the government earned Rs 650 crore and Rs 1,100 crore in 2015-16 and 2016-17, respectively by way of application fee Growing movement against liquor coupled with rising input costs mostly due to a steep hike in licence fee has shrunk profit margin for liquor shop owners. As if that is not enough, there is a provision of heavy penalty if they failed to lift adequate stock. ‘‘The licence fee for an IMFL shop in Jaipur is Rs 22 lakh last year. The price for renewal this year is Rs 25 lakh. Add increased rent for shop, electricity and staff, there is little by way of profit, which is not worth the hassle one faces from the anti-liquor lobby,’’ said Sumit Mehta who bought two shops last year, but decided against renewing their licences.

The rent for liquor shops are almost double than market rent add increased licence fee that is 15 per cent of the estimated sale value, it has now become a high-risk investment in the current scenario, he said, adding that many shopkeepers suffered losses, which was earlier unthinkable.

Excise is third largest tax revenue earner for the state government after GST and sales tax. However, the revenue growth, which according to the excise department has fallen to 5.08 per cent in the previous financial year from a robust 12 per cent per annum.

The revenue from liquor sale has constantly fallen short of the budget targets. In the current financial year, the target was Rs 8300 crore, but the revised estimate has put the collection at Rs 7,800 crore. Last year, the target was Rs 7310 crore, but only Rs 7,053 crore revenue was realised.

The anti-liquor protest has gained momentum in the state in the past couple of years, particularly after the demise of former MLA Gurusharan Singh Chabra whose daughter and daughter-in-law have been campaigning vigorously for prohibition. Their movement succeeded in introduction of an amendment in the Excise Act.