3 days ago
- Business
- New Indian Express
588 defunct excise licences to be auctioned
BENGALURU: The state government is shortly going to auction around 588 defunct excise licences to scale up revenue collection and mobilise resources, informed sources told TNIE. Of the 588 odd licences that will go under the hammer 'soon', 288 are 11-C (government-owned Mysore Sales International Limited retail outlet) licences followed by 204 CL-2 (retail liquor shops) and 96 CL-9 (bars & restaurants), said sources on condition of anonymity.
'These licences have not been renewed for whatever reason, and have been lying defunct. The reason behind the auction is to bring them back into the market and generate revenue for the government. The auction is likely to fetch between Rs 500 crore and Rs 600 crore,' said sources.
The Excise department is presently working out the modalities; from prospective allocation of these licences to the 40 excise districts in Karnataka to suggesting reserve or base price (minimum price of the bids) etc. The draft will soon be shared with the government to finetune it; address legal hurdles and set the base price of the bids.
'The base price may be pegged at 10 to 15 times higher than the Excise licence fee. No decision has been taken so far on this. The government will take the final decision. Majority of licences, especially CL-9, are likely to be allocated to Bengaluru,' added the sources. 'Out of the 288 MSIL licences under consideration for auction, 64 have not been renewed, rest were not utilised and are being considered to be brought back to the main pool,' said sources.
Meanwhile, the liquor industry has responded to the proposed auction with caution. 'Our concern is that multinational companies may end up having an upper hand in these auctions with higher bids. They have the money power to incentivise sales of their brands, which no Indian company or brand will be able to match.
