For decades, liquor has been a mother lode of power and pelf for politicians and businessmen in Karnataka. It has raised the spirits of many a politician who has benevolently looked away when markets were flooded with 'seconds', a euphemism for non-duty-paid liquor. Political parties have even gifted away plum positions in Bangalore and faraway New Delhi to leading lights of the liquor lobby.
But now, some of the tycoons and their political patrons are beginning to sweat as CM S.M. Krishna has set out to hit them where it hurts the most: corporatise (take over) the distribution and sale of every ounce of IMFL (Indian Made Foreign Liquor) produced in Karnataka to thwart the flow of seconds into the market. According to sources, the quantum of non-duty-paid liquor was four times that of stocks arriving with duty-paid stamp.
The initiative has already set the cash registers ringing for the government. It has also discovered that the industry had fudged the volume of sales in order to escape paying taxes. In its two months' existence, the new entity called Karnataka State Beverage Corporation Ltd (ksbcl) has production figures of 5.3 million litres for July and 6.8 million litres for August. (This is up from the stagnant 1.9 million litres a month, the normal average accounted for by the industry for several years now.) Moneywise, that translates into more than Rs 190 crore a month. Enthused, the state government intends to bring about a change in the IMFL duty regime so as to effect a two-fold increase in revenue. Besides, the excise department has cracked down on non-tax-paid liquor. Says Ramasheshan, managing director of ksbcl: "We are monitoring the figures every week so that nobody can fudge their figures (production) any more."
In addition, the government has rationalised the duty slabs on IMFL—that means a significant fall in the prices of...