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Chennai , Nov. 5

THE Tamil Nadu Government took liquor retailing out of private hands to break cartels that controlled trade and to eradicate tax evasion and marketing of spurious liquor, according to the Chief Minister, Ms Jayalalithaa.

Since 2001, the Government has changed the system of granting liquor-retailing licences through auctions to a draw of lots and then to a merit-based allocation. The aim was to prevent irregularities that affected Government revenues and posed a threat to public health, she said in the Assembly on Wednesday while responding to objections raised by Opposition parties to the Bill that sought to replace an ordinance promulgated recently to give effect to the Government's decision.

The changes brought in Rs 548.79 crore in 2001-02 as privilege fees to the Government to license 5,512 shops. In 2000-01, under the auction system, the revenue from privilege fees was Rs 481 crore from 4,193 shops.

Over the years, cartels have attempted to keep the number of retail shops down to corner the retail trade, she said. In 1998-99, there were 4,675 shops, in 1999-2000 it was down to 4,038 and in 2000-01 to 3,646. The Government had to support retail marketing by allocating 547 shops to cooperatives in 2000-01.

In July 2002, the Government set liquor offtake targets for the shops while increasing their numbers to 7,000. This helped to ensure sufficient offtake and curbed tax evasion. The retailers had gone to court over the issue, but the Government's stand was upheld. Again the cartels managed to get around Government's efforts, and when it had called for applications to 7,000 shops, only 5,300 could be allotted.

The Government then brought in a merit-based system for granting licenses. Though 35,099 applications were sold, over 45 per cent of the proposed shops were not applied for, she said.

Therefore, the Government has decided to let the state marketing corporation run the retail outlets and bars in the urban centres and the cooperative societies, as its agency, would run the retail outlets in rural areas, she said.

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