The Jharkhand government under president?s rule recently scrapped the monopoly ?contract? system of distribution of Indian Made Foreign Liquor (IMFL) that prevailed in the state the last five years. The government is set to introduce on April 1 an ?open? excise & prohibition policy, which could see its excise revenue collection go up by as much as 100%.
Jharkhand?s original excise revenue target for 2008-09 was Rs 500 crore. Excise department sources said the state was in no position to meet even the revised scaled down target of Rs 300 crore as only around Rs 145 crore had been collected from April 1, 2008 to January 31, 2009. In order to achieve the target, the state would have to collect the rest in just two months (February and March).
Department sources said Jharkhand could at best end the fiscal with an excise revenue collection of around Rs 160 crore. A change in policy was ?much needed? to boost collection by up to 100%.
They said neighbouring Bihar was estimated to collect around Rs 750 crore from the sale of IMFL during the fiscal.
Bihar has in the past too seen a much higher excise revenue collection: Rs 273 crore in 2004-05, Rs 384 crore in 2006-07, and Rs 451 crore in 2007-08. Jharkhand?s collection, on the other hand, has hovered between Rs 140-150 crore ever since it embraced the ?contract? system in 2004-05.
Bihar pursued an ?open excise policy? in 2004-05, 2005-06 and 2006-07. It switched over to a more rewarding ?corporation? model in 2007-08 with the establishment of the Bihar State Beverage Corp Ltd (BSBCL).
The corporation model needs government infrastructure in the shape of warehouses in all districts as the IMFL companies transact directly with the government department in each district.
“It appears that Jharkhand?s adoption of an ?open? IMFL policy for 2009-10 would be the first step towards the ?corporation? model from 2010-11,” said an industry source.