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Solid and liquid waste management projects under ODF are new focus areas: Amitabh Kant

Highlighting the business opportunities in water and sanitation sector, Amitabh Kant said that under the India Investment Grid, the Department of Industries has identified over 1,800 opportunities in this sector amounting to over $290 billion.

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Solid and liquid waste management projects under ODF are new focus areas - Amitabh Kant

Amitabh Kant, CEO, NITI Aayog today said that India has achieved ambitious targets in the area of water and sanitation in the last 6 years. Owing to the success of the Swachh Barat Mission, all our villages, districts and states are open defecation free. The focus now is on the solid and liquid waste management under the ODF+ framework, he added.

Speaking at the Fireside Chat ‘Financing of the SDGs’ with Naina Lal Kidwai, Past President, FICCI and Chair, ISC, during the India Sanitation Conclave, Kant said that the private sector has a critical role to play and we have to identify investment opportunities in the WASH sector. Government can be a policy maker but all of us, including the private sector, have to join hands in transforming the sanitation and water landscape of India.”

Highlighting the business opportunities in water and sanitation sector, Mr Kant said that under the India Investment Grid, the Department of Industries has identified over 1800 opportunities in this sector amounting to over $ 290 billion. These are in the areas of water treatment plant, sewage collection, treatment, disposal, solid waste management and private sector must participate in these opportunities, he added.

“In the long run, we need commercial financial entities in the private sector who can play a key role. We need to attract both debt and equity in this sector with commercially viable projects,” Mr Kant said.

“Given the scale and the challenge, only technology can provide last mile solution and hardware innovation where businesses develop lower cost and more sustained WASH products is an area of big investment opportunity. There has been a push to encourage innovative solutions in water and sanitation sector,” said Mr Kant.

He emphasized that the WASH sector needs right structured projects with different business models. “Solution-oriented partnerships are the need of the hour in the WASH sector and the private sector has a huge role to play in driving technology and innovation. Research and innovation led by the private sector in designing and implementing along with supporting the government’s effort to reach the last mile is critical,” noted Mr Kant.

He further stated that NITI Aayog is working on different models of structuring that will enable funds to flow into this sector. “We need to create good private sector model, allow debt and equity financing to flow in and we are working on this,” added Mr Kant.

Highlighting the innovative technology adopted by the North East in the water and sanitation sector Mr Kant said, “The solutions have to be highly localized so that there is socio-cultural legitimacy among the local communities. This enables localized maintenance of the technology in the future.”

Ms Naina Lal Kidwai, Past President, FICIC and Chair, ISC said that the three most critical questions that underline the drive to finance sustainable development include how to drive more resources towards the goals; how can ensure that they are going where they are needed most and are they being used in the most effective way.

“There is a view that the financing gap is symptomatic of a business model gap and can prove to be a good starting point to reduce costs, address certain risk issues and catalyse private sector solutions,” she added.

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Policy & Politics

New Development Financial Institution should balance between infrastructure and development needs

Union Finance Minister Nirmala Sitharaman, in her Budget speech, said that a Bill would be introduced to set up a DFI and Rs 20,000 crore would be provided to capitalise the institution. ‘The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years’ time,’ she said.

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Professor Stephany Griffith-Jones, Financial Markets Director, Initiative for Policy Dialogue, Columbia University, said that the focus on DFIs now is on helping countries to achieve ‘green growth’, promote innovation, provide counter-cyclical finance not just to the infrastructure sector but also crucial areas.

Former Deputy Governor of the RBI, Rakesh Mohan, on Friday suggested that the proposed new Development Financial Institution (DFI) needs to attract ‘patient capital’ investors as well as leading experts on its board and in top management. Mohan, who was also a former Executive Director at the IMF, made these comments during a webinar organised by the think-tank Research and Information System for Developing Countries (RIS) and India International Centre.

It comes in the backdrop of the Union Budget 2021-2022 recognising the long-term debt financing needs of the infrastructure sector and proposing a “professionally managed” DFI “to act as a provider, enabler and catalyst for infrastructure financing”. Finance Minister Nirmala Sitharaman, in her Budget speech, had also said that a Bill will be introduced to set up a DFI and provided Rs 20,000 crore to capitalise the institution. “The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years-time,” she had said. Later, Financial Services Secretary Debasish Panda had reportedly said India Infrastructure Finance Company Limited could be subsumed into the new DFI – the National Bank for Financing Infrastructure and Development. The proposed DFI will also play a crucial role in realising the National Infrastructure Pipeline, under which around 7,000 projects have been identified with an estimated Rs 111 lakh crore-worth of investment between 2020 and 2025.

Rakesh Mohan also proposed that the new DFI should be headquartered in Mumbai, India’s financial capital. The first CEO or CMD of the proposed DFI should be a person with India’s best interests in mind.

Echoing Mohan, former Deputy Governor of RBI Shyamala Gopinath also said there should be an emphasis on good governance. In addition, there is a need to focus on issues such as contract enforcement and project bankability, she said.

Speaking on the occasion, former Executive Director of IDBI, G. A. Tadas, said the Budget proposal of providing Rs 20,000 crore to capitalise the institution will not be sufficient to finance infrastructure projects to the tune of Rs 111 lakh crore by 2025 and help the country to be a USD 5 trillion economy. The initial capital for the DFI needs to be augmented to at least Rs 50,000-60,000 crore to achieve a portfolio of around Rs 5 lakh crore in the next three years, he added. He said there has to be an emphasis on a robust risk management System.

Professor Stephany Griffith-Jones, Financial Markets Director, Initiative for Policy Dialogue, Columbia University, said the focus on DFIs now is on helping countries to achieve ‘green growth’, promote innovation, provide counter-cyclical finance not just to the infrastructure sector but also crucial areas such as health and other social sectors. Larger number of DFIs can have greater impact, she said, adding that post the COVID-19 pandemic outbreak, the DFIs have seen a renaissance.

Professor Sachin Chaturvedi, Director General, RIS and Professor Milindo Chakrabarti, Visiting Fellow, RIS, also spoke during the programme.

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Policy & Politics

Bank account & property will be seized for violation of GST rule

Bharat vyapar bandh on 26 February on the call of CAIT .

Tarun Nangia

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The Confederation of All India Traders (CAIT) has called for a Bharat Vyapar Bandh on February 26, and the trade organizations in all the states of the country have decided to join the bandh. CAIT has called for a Bharat Vyapar Bandh, against the recent amendments to the GST rules as it is adverse to business and demanding a ban on e-commerce company Amazon immediately.

CAIT National President B C Bhartia & Secretary General Praveen Khandelwal said that said that on February 26, “Dharna” will be organized at about 1500 places across the country, including Delhi, to raise traders voice against the unjustified amendments in GST rules and traders across Country will not login GST portal on Bandh day as a mark of protest . They said that most of the leading trade organisations in different states of the Country both at national and state level including Delhi have decided to join the vyapar bandh, while some other organizations will also announce their support by this evening.

Bhartia and Khandelwal told that Bharat Vyapar Bandh of traders will be rational and peaceful across the country. While wholesale and retail markets will remain completely closed, shops selling essential commodities have not been included in the shutdown in view of the need of the citizens of the country. Shops which cater to the needs of people in residential colonies have also been kept out of the bandh. They said that shutting down vyapar even for a day was never the intention of the traders but it is the changed format of GST which has forces us for holding a day long Bandh. GST tax system has become very complex rather than simplified and is completely contradict the original declared vision & purpose of GST implementation, which has now become a never ending cycle of huge compliance’s.Instead of simplifying and rationalizing the tax system, the GST Council is working towards imposing maximum burden of tax on traders, which is grossly undemocratic.

Bhartia and Khandelwal said that after amendment in the current rules, the tax officer has been given unlimited rights to many things because of which now the GST registration of any trader will be in hands of the tax officer and he can cancel it even without giving any notice or opportunity of hearing, he can also seize the traders bank accounts and property, also Input credit of tax paid to traders can be blocked. Such provisions will discourage traders and create many obstacles in doing business.

CAIT Delhi State President Vipin Ahuja & State General Secretary Dev Raj Baweja said that the trade associations connected to scooter parts, electrical goods, medicines, computers and computer accessories, chemical, paint chemicals, bicycles, toys, papers, stationary in Delhi , Iron and Hardware, Sanitary Goods, Iron Trade, Jewelery, Rubber Plastics, FMCG Goods, Cosmetics, Readymade Garment, Wood & Plywood, Building Materials, Grocery, Oil, Spices, Food, Electronics, Mobile, Furnishing Fabric, Gift Items, Photo , General store, tarpaulins, ferro alloys, acrylic, aluminum, metal, machinery, marble, radio and radio parts, cement, file and envelope makers, handloom and handloom fabrics, metal scrap, agricultural implements, in Delhi and all over the Country have declared their support to Bharat Vyapar Bandh.

CAIT national president B.C. Bhartia and secretary general Praveen Khandelwal said that on 26 February “dharna” will be organised at about 1,500 places across the country, including Delhi, to raise traders’ voice against the unjustified amendments in GST rules and traders across the country will not login GST portal on that day as a mark of protest .

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Policy & Politics

Government aims to become self-reliant in silk sector in two years

Tarun Nangia

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Smriti Zubin Irani, Union Minister of Textiles and Women & Child Development Government of India today said that the recent Budget has brought cheer to the textile industry with the announcement of seven mega textile parks. Additionally, INR 10,000 crores have been dedicated by the Govt of India for PLI schemes, specially dedicated to MMF and technical textiles.

Addressing the inaugural session of the Karnataka VastraTek – Apparel & Textile Conclave organised by the Department of Handloom and Textiles, Govt of Karnataka in association with FICCI Karnataka State Council, Ms Irani elaborated on the growth of the silk sector in the state, Ms Irani said that Karnataka reigns in the realm of silk. “Under the Silk Samagra Program, the Govt of India dedicated specifically over INR 2,000 crores for the development of silk. I am hopeful that the industry gives the state of Karnataka ideas, proposals or initiatives that can make our country Atmanirbhar in silk. We in the Ministry of Textiles are looking at the next two years to ensure that India is self-reliant in the space of silk,” she said.

“Just reducing the produce line to saris and garments would be doing a great injustice to the potential of the silk sector. We are aware that silk, especially the waste of a cocoon can be used by pharma and cosmetic companies. We are hopeful that industry captains can suggest usage of silk waste to help elaborate our production line or elaborate our diversification prospects, Ms Irani added.

On the future of textiles in the state of Karnataka, the Minister said that the MSP operations for cotton procurement by the Cotton Cooperation of India has touched over INR 359 crores in the state. “From 2014-15 to this year, the Ministry of Textiles has extended support of over INR 1,622 crores only for cotton procurement and MSP operations benefiting over 1.67 lakh farmers,” she said.

Highlighting the importance of the handicrafts sector, the Minister said that Pehchaan Cards were distributed to over 26,000 artisans. The latest handloom census has brought to light that there are over 50,000 weavers in Karnataka who are looking at new opportunities digitally to expand their markets. She further suggested that on lines of the GeM portal that has brought on-board over 1,50,000 weavers from across the country, a similar digital opportunity is given to the marketing of artisans and weavers of Karnataka.

The textile and the apparel sector were tested as an industry during the COVID times and we rose to that challenge nationally and internationally by becoming the second largest manufacturers of PPE suits. “The fact that we could turn around our manufacturing processes in less than 60 days to meet the immediate need of our country speaks volume and is a testimony to the talent of the textile industry,” she added.

Mr Shrimanth Balasaheb Patil, Minister of Handloom and Textile & Minority Welfare Department, Government of Karnataka said that the state was first state to implement a dedicated textile policy and has been an inspiration to other states in the country for the same. The Doddabalapur Integrated Textile Park is the first integrated textile park of the country spread across 48 acres of land and has over 85 units focused on weaving, warping, among others and has generated employment for over 8000 people.

“The Govt of Karnataka is committed to providing world class facilities with easy access to railways, airports and ports for the smooth export of goods and materials. The new Textile and Apparel Policy 2019-2024 has been formulated keeping industrial requirements in mind and the incentives provided is the best in the country. With constant monitoring, the sector will be able to tide over the difficult situation induced by the pandemic,” he said.

Mr Ullas Kamath, Chairman, FICCI Karnataka State Council & Joint Managing Director, Jyothy Labs Ltd said that the special emphasis given by the union budget 2021 to the textile and apparel sector to set up large textile parks are extremely important.

“Very few countries can boast of robust textile value chains that India has. Karnataka has been one of the key states of apparel and garment supplies to both domestic and international markets and the textile industry occupies key position in terms of its contribution to the state’s economy. The policy intervention by the Govt of Karnataka have created thriving manufacturing clusters.” he said.

The FICCI Karnataka State Council has been taking sector specific initiatives to improve industry performance. For the textile and apparel sector we are forming a subcommittee with leading garment manufacturers and this will certainly help to bring more vibrancy, he added.

Dr A Sakthivel, Chairman, Apparel Export Promotion Council (APEC) said that with the support and help extended by the Centre during in the last year, India became the second largest manufacturers of medical textile.

“Karnataka plays a vital role in apparel exports and does about INR 17,000 cr worth of exports per year. The state govt should utilise the PLI scheme and promote MMF garments in a big way, he said. There is a need for plug and play facilities for apparel manufacturing and processing, he suggested.

Speaking on the industry’s role, Mr R D Udeshi, President, Reliance Industries Limited said, “The time has come for the industry to come forward and be aggressive for reinvestment and become one of the major manufacturing hubs in the global arena. We, as an industry, have proved ourselves during the pandemic. From importing PPE suits to manufacturing and exporting the same, this has proved that the industry has the willpower and manufacturing excellence.”

Mr Jacob John, President – Premium Brands, Adithya Birla Fashion & Retail Limited said that the retail sector is pleased to see business bouncing back after a prolonged crisis induced by the pandemic. “With the steps taken by the govt, we expect business to attain normalcy by Q2 of FY22,” he said.

Mr Siddhartha Agarwal, Co-Chair, FICCI Karnataka State Council and Managing Director, Bhoruka Park Private Limited delivered the vote of thanks and said that the conclave had been organised against the background of the new state textile policy unveiled by the Govt of Karnataka.

On the future of textiles in Karnataka, the minister said that the MSP operations for cotton procurement by the Cotton Cooperation of India has touched over Rs 359 crore in the state. ‘From 2014-15 to this year, the Ministry of Textiles has extended support of over Rs 1,622 crore only for cotton procurement and MSP operations benefiting over 1.67 lakh farmers,” she said.

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Policy & Politics

India and Mauritius sign comprehensive economic cooperation and partnership agreement

As regards trade in services, Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors, such as professional services, computer related services, research & development, other business services, telecommunication, construction, distribution, education, environmental, financial, tourism & travel related, recreational, yoga, audio-visual services, and transport services.

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Dr Anup Wadhawan, Commerce Secretary, Government of India, and Ambassador Mr. Haymandoyal Dillum, Secretary of Foreign Affairs, Regional Integration and International Trade, Government of Mauritius signed the India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA)  in Port Louis yesterday, in the august presence of Prime Minister of Mauritius Mr Pravind Jugnauth, and External Affairs Minister, Govt of India, Mr S. Jaishankar.

CECPA is the first trade Agreement signed by India with a country in Africa. The Agreement is a limited agreement, which will cover Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Financial services, Customs Procedures and Cooperation in other Areas

Impact/benefits: CECPA provides for an institutional mechanism to encourage and improve trade between the two countries. The CECPA between India and Mauritius covers 310 export items for India, including food stuff and beverages (80 lines), agricultural products (25 lines), textile and textile articles (27 lines), base metals and articles thereof (32 lines), electricals and electronic item (13 lines), plastics and chemicals (20 lines), wood and articles thereof (15 lines), and others. Mauritius will benefit from preferential market access into India for its 615 products, including frozen fish, speciality sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment, and apparel.

 As regards trade in services, Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors, such as professional services, computer related services, research & development, other business services, telecommunication, construction, distribution, education, environmental, financial, tourism & travel related, recreational, yoga, audio-visual services, and transport services.

 India has offered around 95 sub-sectors from the 11 broad services sectors, including professional services, R&D, other business services, telecommunication, financial, distribution, higher education, environmental, health, tourism and travel related services, recreational services and transport services.

Both sides have also agreed to negotiate an Automatic Trigger Safeguard Mechanism (ATSM) for a limited number of highly sensitive products within two years of the Signing of the Agreement.

Timelines: The Agreement will come into force at an early date.

The India-Mauritius CECPA will further cement the already deep and special relations between the two countries.

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Policy & Politics

CARE FOR YOUR AND OTHERS’ LIVES

As soon as the launch of the Covid-19 vaccine was announced, people threw all the caution to the winds. This careless attitude is responsible for the reappearance of the coronavirus pandemic. The need of the hour is to take strict action against those whose careless attitude is not only endangering their own lives but that of others too. Moreover, vaccines should be made available in the open market.

Vijay Darda

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As the New Year dawned, it looked like that the coronavirus pandemic was now tapering out. The number of Covid positive patients was declining rapidly and the death count was also going down, but by mid-February, reports of a fresh coronavirus outbreak from several parts of the country started pouring in again. The situation is getting worse in Karnataka and Maharashtra. The situation in Amravati, Wardha, Yavatmal, Akola, some suburbs of Mumbai and Nagpur in Maharashtra is turning to be serious. If we look into the reasons, then one thing is clear that it is the negligent behaviour of the people that is responsible for this worsening situation.

 If I were to talk about my state Maharashtra, hundreds of people attended the wedding functions that took place on Vasant Panchami’s Muhurat and people neither took any precaution nor used sanitizer. They behaved as if the Covid-19 crisis was over, and there was no need to be afraid of anything! About 500 to 600 people had gathered in each marriage hall. These marriages have proved to be the hubs of the Covid-19 outbreak. The hard work and dedication of the government officials, doctors, other agencies who had subdued the pandemic and got letters of appreciation for being Covid Warriors, have all gone in vain. The organisers of wedding ceremonies are responsible for the new crisis, the hotels and the wedding halls as well as the officials of municipal corporations are also largely responsible. This could not have happened without their collusion.

Besides, the careless attitude of people in putting on masks and not following social distancing norms is leading to a surge in coronavirus cases again. Even if people are putting on masks, they are wearing it improperly. It keeps hanging below their nose or below their chin. With this kind of poor discipline, the atmosphere is proving conducive for the spread of coronavirus pandemic. If even one person in the crowd is a Covid-19 patient, he will infect a multitude of people. How can we forget that we have lost many of our near and dear ones due to Covid-19 pandemic. I believe that it is very important to open the markets because it is related to the livelihood of the people but at the same time we have to adopt some rules otherwise how will we be able to protect ourselves from this deadly virus? If the Covid-19 cases continue to rise, it will directly affect our economy. We have come out of lockdown with great difficulty and the economy has somehow started coming back on track.

Under these circumstances, if the situation worsens again, it will not only affect those Covid-19 positive patients, but other people will also suffer. If the lockdown or curfew is required again, the situation will worsen. From the common man to traders, businessmen and industrialists, they all are still reeling under the impact of coronavirustriggered lockdown and the very thought of the lockdown again is enough to give them shudders. The condition of schools is also very bad. They are grappling with the challenges of recovering the fees from parents and paying their staff. It is unfortunate that people are not thinking about it. They neither care for their own lives nor of those of others. In my view, such reckless people are enemies of the society.

The situation warrants strict action against them so that they would desist from indulging in such careless activities again. Besides, the government should now step up vaccination drive too. At present, just the frontline warriors are being vaccinated. Covid-19 vaccination in India started on January 16 and one crore people have been vaccinated in a month. If the pace remains the same, then just imagine how long it will take to vaccinate all the needy people. It has been reported that ordinary people above the age of 50 years will be vaccinated in the middle of March. The question is why the speed of vaccination is not being stepped up when we have about 10 crore vaccines ready and the Serum Institute of India and Bharat Biotech are engaged in developing the vaccine at full capacity. Why so much delay in giving vaccines to people above 50 years of age? It is reported that the glitches in the app have slowed down the vaccination but now they are being corrected. So, should it take so much time in today’s technological age? Let me inform you that Tamil Nadu government has also started vaccinating the journalists because they too have been in the frontline war against the coronavirus pandemic. That is very encouraging.

And the second biggest thing is that since we have lakhs of vaccines, then why doses are not being made available in the open market. By open market, I do not mean drug stores but private hospitals. Private sector hospitals in our country are well equipped with resources and if their help is taken, the pace of vaccination will become faster and the burden on the government will also be reduced. Those who have the ability to spend money for the vaccine should go to a private hospital. And the government should make arrangements at its centres for those who do not have money for getting vaccinated at private hospitals. Now, the common people are also wishing that the vaccine should be made available in private hospitals and the government should fix the rate of the vaccine and ensure that no hospital charges more than the prescribed amount.

India has overcome many diseases by vaccinating its vulnerable population. It is due to the series of vaccination drives that the immune system of Indians is much stronger than people living in countries of Europe and America. This is the reason why the impact of the coronavirus pandemic has been relatively low on us. We are the number one in the world in terms of vaccination. Our resources and our potential are immense. The vaccination of the population on a mass scale can definitely help us beat the coronavirus. But this does not mean that we abandon the path of prevention. We should not become guilty of criminal negligence. Take care of your life and do not play with the lives of others. Wear the mask in the right way. Follow the safe distancing norms. Be healthy and keep others healthy too.

The author is the chairman, Editorial Board of Lokmat Media and former member of Rajya Sabha.

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Policy & Politics

MAKING IT HAPPEN: TRANSFORMATIVE EXCISE POLICY

Anil Swarup

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It is a moot point whether respective State Governments should impose prohibition, banning sale of potable alcohol. Some States like Gujarat and Bihar indeed have. There are arguments both for and against it. However, everyone admits that excise revenue arising out of tax on liquor sale constitutes a big chunk of the overall revenues of any state. At the turn of the century, there were unmistakable signs that the excise sector was struggling on account of monopolistic structure at least in the State of Uttar Pradesh. When S P Gaur took over as Secretary in the Excise Department of the State, he was briefed by the then Excise Commissioner, Pravir Kumar who too had recently taken over this sensitive assignment. He gave him an overview of the excise scenario in the State. The excise earning of about Rs. 2100 Crore constituted 17% of the total tax revenue. There was a monopoly of excise contractors. The distilleries and consumers were hapless sufferers at the hands of these contractors. Seven groups (each in one or a group of Districts) of excise contractors had taken control of the entire State, with distillers & consumers reduced to non-entities.

Under the prevalent system that was almost a century old, the excise vends came to be auctioned District-wise annually. A similar auction-based system was in vogue in most neighbouring States. Magnitude of licence fees for the district was so large (more than Rs.100 crore in urbanised districts) that small players couldn’t participate in the auctions. The whole process was reduced to a farce as a handful of big contractors cartelised and carved out their respective districts or a group of them for excise business. The monopolists would influence the excise policy, rules, dictate terms to the distillers and charged arbitrary price from the consumers. Not infrequently, they would refuse to yield any increase the bid amount. The government, expecting higher revenues in a competitive environment, was left with little elbow room to negotiate with the licensees.

The new team at the helm of Excise Department had the benefit of the K.N. Singh Committee Report that had highlighted concerns about the growing influence of excise monopolies. Further, a comparatively low per capita consumption of liquor in UP implied a suppression of consumption data by licensees. They had a vested interest in projecting lower sales, indulging in supply of illicit liquor, smuggling & excise duty evasion. The consumers, being unorganized and without a lobby, were made to pay the price. Besides, the supply of country liquor in poly-pouches spelt disaster for the environment with disposal of 100 lakh pouches every year. This disposal impacted water bodies as well.

The refusal of excise contractors to bid for higher revenues for 2000-01 precipitated a crisis. It was too late to make amends for the auctions due in March 2000. Major strategic reforms, however, became imminent in the excise sector of the State. S P Gaur and his team had consultations with all the stake-holders that included distillers, District Collectors and excise officials.

With support from Excise Minister and the new Chief Minister, Rajnath Singh, it was decided to undertake major reforms instead of tinkering here and there. A new Excise Policy (NEP) was considered. The objective of this Policy was to eliminate the monopolies, facilitate entry of new enterprise in excise sector and to settle the excise vends in a transparent and fair manner.

As a prelude to NEP, an innovative Beer Project, entailing a paradigm shift, was devised. The excise duty, collected at a brewery, was now to be a major source of excise revenue with licence fee playing secondary role. The Beer Project met with stiff opposition from the powerful contractor’s lobby. After a protracted legal battle, the government settled 1326 new beer licences in summer of 2000. The new licences, with a small licence fee and simplified terms and conditions, were allotted on the basis of publicly held lottery. This Project gave unexpected sales and opened up the system. Beer prices crashed from Rs.65 to Rs.35 per bottle. Besides releasing this segment of liquor from the clutches of regular contractors, it opened up the system and brought several thousand new entrepreneurs in the sector. A new excise policy (NEP) was born!!

Encouraged by the success of the Beer Project, the team toiled day and night to work out alternative options and their implications under New Excise Policy. An inter-State meeting of 10 major excise earning States was held in November, 2000 to identify the best excise practices & consolidate the essential elements of NEP without compromising the total revenue. It provided for low licence fee, simplified entry level terms & conditions, allotment of shops by respective District Collectors through public lottery, and set the vendors free to buy liquor from any State distillery. The country liquor pouches (200 ml) were to be replaced by bottles (180 ml). It introduced Maximum Retail Price (MRP) and holograms using latest technology for checking duty evasion.

There were apprehensions about a fall in excise revenue as every 180 ml bottle contained 20 ml less country liquor than a poly-pouch. Even the Cabinet Minister shared these apprehensions but he played along in view of the larger benefits. The NEP was approved by the Cabinet. The Policy was put into operation within 2 months. The Excise Minister was partly correct as during the first year of NEP, there was a lower increase in the revenue that was expected. Subsequently, however, the excise revenue rose phenomenally to reach Rs. 27,323 Crore. It also ensured safe and better quality liquor to consumers at a fair price. His place as a stakeholder was duly recognized. By eliminating the use of poly- pouches, the Policy reduced the soil and water pollution a great deal.

The team led by S P Gaur and Pravir Kumar demonstrated that out-of-box-thinking is possible in bureaucratic framework as well and if it is done by taking stake holders into confidence, with imaginative planning and meticulous execution, it can yield the desired results. Here was a team that made-it-happen and it sustained over the years as they put in place institutions to sustain what they had created.

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