Financial Daily from THE HINDU group of publications
Monday, Feb 17, 2003
Government - States
Annual plan in prohibition land
IT IS time again for that particular roll of the dice for the Gujarat Government that finds itself caught in a fiscal cleft, yet again. And for the umpteenth time the whipping boy in Gandhiji's own country is that metaphysical state of affairs called Prohibition.
Proven time and again to be a certain face saving device, prohibition is finding respectable lengths of column centimetre in the newspapers here once again. The juice of these reports invariably boils down to how much the State is losing by way of revenue and the massive blow it is taking on the tourism front.
There is no denying that the State's revenues could do with a dose of excise earnings from legally sold booze and that figure is conservatively put at Rs 1,600-2,000 crore per annum. Only the other day a travel mart organised by the Vadodara Chamber of Commerce and Industry blasted the State government for its hackneyed approach to the issue. One speaker after the other picked holes in a policy that allowed bootlegging to flourish in a major way even as Gujarat kept up with the pretence of abstinence.
The flip side, of course, was that it kept losing out to other States both as tourist and industrial destinations. Just to drive home the point, Mr Yatin Dossa, president, Travel Agents' Federation of India, even dropped the not so subtle hint that Gujarat was competing with places like Goa as potential tourist destinations.
It is not that such sentiments do not find echoes among the bureaucrats as the State limped from one miserable fiscal year to the other. True to form, Gujarat has raised the benchmarks a wee bit more and slated the annual Plan for 2003-04 at Rs 7,829 crore. Seen in the backdrop of the Rs 7,600 crore Plan size in 2002-03, it makes impressive reading but the fact of the matter is there has been a general drying up in revenues of late and it is a matter of time before the finance department begins the `downsizing' exercise yet again. Because, this well trodden terrain and the sad side is that there seems to be not much variation in the way this exercise pans out year after year.
The current fiscal which is in its last leg has witnessed not one but three revisions in the plan size and now its stands at Rs 6,000 crore.
If 2001-02 was another year that started out with a lofty plan size of Rs 7,600 crore, it now stands pruned at Rs 5,310 crore. And it does not require much crystal gazing skills to predict that the script for the current fiscal and the one to follow cannot be much different.
Now, the informal proposal doing the rounds in the Sachivalaya circles is that one must use the cover of an even holier cow than prohibition if one is to consider even a selective and conditional lifting of the ban on booze in the state.
"If the State government were to announce that excise revenue receipts from the sale of liquor will directly be used to fund the Sardar Sarovar Project (SSP), the political response to the development would be a guarded one. It would be a question of vote bank politics and it is till date untested territory. And it is here that the State government can piggyback the investment bandwagon by allowing prohibition free zones in industrial clusters," said a senior bureaucrat who preferred not to be named for obvious reasons.
The State administration, which of late has been moving from one departmental presentation to another, may be just about getting sick of ideological posturing. Having unearthed no new source of revenue in its run up to the new budget, the odd windfall gain by way of enhanced crude royalty notwithstanding, even the state machinery seems to be longing to lay to rest old bogeys and get a move on. Meanwhile, the guzzlers of the state are left wondering whether the state actually has the gumption to leave behind the cloak-and-dagger stuff the moment one breathes the word booze and instead say Cheers!
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