Odisha Excise Policy fails to attract investors

By Shubhankar Behera

Bhubaneswar: Despite a slew of measures announced by Odisha government in its Excise Policy 2016-17 including slashing of deposit fee from Rs 80 lakh to Rs 20 lakh for setting of new units, no investors have evinced interest to establish new facilities in the State.

Official sources said, no proposals have been received by the Excise Department for installation of new units so far.

“Yes, we wanted to attract investors both from Odisha and outside. But so far we have not received any such proposal”, said Prasant Kumar Senapati, Excise Commissioner. He informed this on the sidelines of attending the inauguration of OSBCL’s (Odisha State Beverages Corporation Limited) cashless transaction here.

The official however was hopeful of getting proposals for installation of new breweries and distilleries in future.

To woo investors in liquor manufacturing sector the Odisha government in its Excise Policy 2016-17, which came into effect from 1 April, 2016, had slashed deposit fee for new units from Rs 80 lakh to Rs 20 lakh. Besides slashing manufacturing tax on beer, it had also reduced import fee for bulk import of beer by Rs 5 per litre.

Industry analysts however contribute this to the impact of liquor ban in neighboring Bihar. They observe apprehension of a similar ban in Odisha deterred the sector’s major players to invest in the State.

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“Broadly it is directly linked to liquor ban in Bihar in April last year. The investors might have thought Odisha may go Bihar way and in that case they will lose money”, said Prakash Kumar Dhal, an analyst.

He too opined that revenue from excise being one of the major contributors to the State exchequer, it might not follow Bihar as anticipated. This was evident when Excise minister Damodar Rout recently rejected the implementation of a Supreme Court order in Odisha which banned liquor shops within 500 metre of National and State highways across the country.

While the excise collection in 2015-16 was Rs 2568 crore, this time the government expected an additional Rs 800 crore. Analysts feel post demonetisation, the State government is unlikely to meet its excise revenue target as the move by the Centre has severely hit liquor sales in Odisha.

Out of the total 3,843 liquor shops in the State, 50 per cent have reported a decline in sales following banning of Rs 500 and Rs 1,000 currency notes from November 8 mid-night, official sources said.