Hyderabad: Andhra Pradesh Chief Minister Chandrababu Naidu Wednesday said the excise policy implemented under his predecessor and YSR Congress Party chief Jagan Mohan Reddy’s government was “deceptive, flawed and inconsistent”, and vowed to order a CID probe into large-scale irregularities in the sector over the last five years.
He further said that the policy not only damaged the health of alcohol consumers but also impacted state revenues, pegging the losses in excise revenue under YSRCP rule at Rs 18,860 crore. He made the accusations while presenting a white paper in the state assembly on the Andhra Pradesh excise policy and alcohol supply under the previous government.
Apart from a CID probe into alleged irregularities, Enforcement Directorate (ED) intervention too will be sought, Naidu said, “as liquor sales from government outlets were carried out only in cash, refusing online payments”.
Vasudeva Reddy, who was the commissioner of distilleries & breweries and managing director of Andhra Pradesh State Beverages Corporation Ltd during Jagan’s rule, has already been booked by the CID in connection with the alleged scam.
Naidu said 1.78 crore litres of illicitly distilled liquor was seized between 2019 and 2024, when the YSRCP was in power, and seizures of non-duty paid liquor (NDPL) went up by 66 percent compared to those made during the previous Telugu Desam Party (TDP) government.
“There is a 52 and 54 percent increase in liver and kidney ailments as compared to 2019. There is a 64 percent increase in criminal cases compared to 2014-19,” the CM said.
This is the fifth white paper the TDP chief has brought out in, what he said was, a bid to make “the misadministration and misdeeds of the YSRCP regime” public. Naidu earlier released white papers on the Polavaram irrigation, Amaravati capital project, the state’s power sector and misappropriation of natural resources (lands, minerals and forests). A paper on the state’s finances is in the works and another on law and order is also expected soon.
Jagan and his party are yet to publicly respond to Naidu’s white papers.
Also read: Naidu’s 4th white paper blasts Jagan regime for ‘loot’ of natural resources. Anti-land grab law soon
‘YSRCP tenure a case study of how a ruler should not be’
Unlike the previous papers, which the CM unveiled from the state secretariat in front of the media, Naidu presented the paper on excise policy, along with a presentation, in assembly.
“YSRCP’s 2019-24 tenure is a case study to demonstrate how a ruler should not be. These seven papers are intended to clearly explain (to the public and you) the damage caused to AP in the last five years in various sectors,” Naidu told lawmakers, which included deputy CM Pawan Kalyan, the leader of the Jana Sena, an ally of the TDP in the BJP-led ruling National Democratic Alliance (NDA) at the Centre.
However, 20 YSRCP legislators and party chief Jagan were absent from the house. On Wednesday, the former chief minister led a protest at the Jantar Mantar in New Delhi against the “targeted violence and killing of YSRCP cadres and break down of law-and-order situation in AP”. He was joined by several prominent opposition Indian National Developmental Inclusive Alliance (INDIA) leaders, including Samajwadi Party’s Akhilesh Yadav.
The AP legislature is in session to pass the vote-on-account budget and other bills. Saying there was a financial crisis in the state, the CM has said a full-fledged budget will be presented after two months.
‘Jagan misled people’
While presenting the white paper Wednesday, Naidu claimed that during the 2019 polls, Jagan misled people by promising to phase out most liquor outlets in the state.
“4,380 shops were reduced to 2,934, but again increased to 3,392, with the addition of 458 AP Tourism Development Corporation outlets. And the number of bars remained at 840 like they were in 2019,” said the CM, reading from the paper. “This shows the lack of commitment to prohibition promise and insincerity of intent.”
Naidu claimed Jagan’s excise policy was “based on a flawed assumption that increasing liquor prices would reduce consumption”. On the contrary, the policy led to an increase in black-market sales, bootlegging, crime and adverse impact on people’s health, he alleged.
Naidu claimed that the Additional Retail Excise Tax (ARET) on alcoholic beverages was frequently increased, resulting in the Maximum Retail Prices (MRPs) shooting up by 75 percent. The ARET was introduced at a flat rate per bottle through a government order in September 2019. It was doubled on 4 May 2020. Another order was issued the very next day, doubling the charge. For example, ARET on a 750 ml IMFL bottle went from Rs 80 to 160 to 320. The tax on a 180 ml bottle went up from Rs 20 to 40 to 80.
The tax, at that time, was referred to as COVID-19 cess and raised concerns in the liquor industry apex body Confederation of Indian Alcoholic Beverage Companies (CIABC). The body urged the then CM, Reddy, to reduce the levy to safeguard the industry interests and also the state revenues. Excise income is one of the major heads of a state’s revenue.
Naidu said that the “large difference between the MRPs of medium, premium brands as compared to Karnataka and Telangana, resulted in large-scale smuggling of alcohol into AP.” While the per capita consumption of liquor in AP went up from 5.5 litres in 2019-20 to 6.23 in 2023-24, Naidu said AP excise revenues suffered because of the flow of illicit liquor and NDPL from the neighbouring states.
AP’s excise revenue loss was a gain of neighbouring states, the paper said. While in 2018-19, AP’s volume was 40-50 lakh cases more than the sales in Telangana, in 2023-24 Telangana’s sales were 15 lakh cases in excess. In 2018-19, Karnataka was selling 200 lakh cases more than AP, but in 2023-24 it was selling 350 lakh cases excess, it added.
Though the Jagan government formed a dedicated Special Enforcement Bureau in May 2020, headed by an IG rank officer, the white paper claimed it could not successfully control illegal liquor because of a lack of coordination between different authorities, like the Commissioner, Excise, MD – APSBCL and DG Police. However, Naidu said 1.78 crore litres of illicitly distilled liquor was seized by authorities, while the amount of NDPL seized went up from 8,31,290 litres during 2014-19 to 13,81,790 litres in 2019-24 — a 66 percent increase.
The number of illegal liquor cases registered increased from 2,04,132 in 2014-19 to 3,35,605 in 2019-24 — a 64 percent increase, while arrests went up by 161 percent from 1,30,460 during 2014-19 to 3,41,243 in 2019-24.
“Majority production capacities were taken over by new entities by intimidating old companies. Payments to MNCs like Pernod Ricard, United Breweries were inordinately delayed and orders were stopped thus driving them out. Pliant local producers were allowed to operate,” Naidu said, alleging corruption and accusing the YSRCP leaders and functionaries of benefiting from the control of the liquor supply chain.
“The market share of major MNCs was substantially reduced from 2019-2020 onwards and some names like Pernod Ricard, Bacardi India, John Distilleries have completely been wiped out from the market. Local distilleries like SNJ Sugars & Products, Pearl Distillery, SPY AGRO, Sentini Bio Products Pvt Ltd etc. have captured a major share in AP market,” said the paper.
Naidu alleged Rs 3,113 crore was estimated to have been collected in the form of extortion and other illegal activities.
(Edited by Sanya Mathur)
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