No renewal of incentive scheme for wines
GOVERNMENT SHOULD THINK ABOUT ECONOMY, NOT POLITICS, SAY GRAPE MERCHANTS
MUMBAI: A proposal put forth by the state industries department to restart the Wine Industrial Promotion Scheme (WIPS) failed to get the approval of the state cabinet after ministers from the Bharatiya Janata Party (BJP) strongly objected to it. The proposal was shot down in the cabinet meeting on November 17, leaving Maharashtra’s wine policy in limbo.
Ministers such as Sudhir Mungantiwar, Girish Mahajan and deputy chief minister Devendra Fadnavis opposed the scheme vociferously on the ground that allowing its revival was likely to show them in a bad light, since they had opposed liquor and wine promotion decisions taken by the Uddhav Thackeray-led Maharashtra Vikas Aghadi (MVA) government in the past.
In January this year, the BJP had countered the MVA government’s decision to allow the retail sale of wine in walk-in shops and supermarkets. Fadnavis, who was then leader of the Opposition, had then remarked that the government was converting Maharashtra into ‘Madya Rashtra’ or liquor nation.
“The ministers felt it would set a wrong example, as they themselves had opposed past decisions on this score,” said a minister who was part of the cabinet meeting held on November 17. “They were also wary that the Opposition would make an issue out of it.”
State industries minister Uday Samant and secretary Harshdeep Kamble tried to convince the cabinet members that they were not bringing in any new scheme, and the proposal was merely the revival of an old scheme that was halted due to financial exigency. “However, their explanations were to no avail,” said the minister.
WIPS is an incentive scheme initiated in the state in 2009 to encourage the wine industry. The scheme was stalled for a while due to the financial crunch in the wake of successive Covid-19 lockdowns from June 2020. Now, with the state’s economy improving, the industries department is keen on reviving the scheme, given the fact that grapes are produced in many districts in the state.
Wineries are charged a valueadded tax (VAT) of 20 per cent, of which 16 per cent is refunded as rebate under WIPS. In addition, a marginal rate of excise duty—rs 10 per bulk litre—is also being levied on wine producers from January 01, 2022, as their two-decade-long tax holiday came to an end on December 31 last year. WIPS is solely for those who produce wine from grapes grown in Maharashtra.
Maharashtra has around 40 to 45 operational wineries. Of these, between 15 and 20 units directly market their products while the rest are only manufacturers. The wine industry has a turnover of around Rs 1,000 crore in India, of which 65 percent is in Maharashtra. Most wineries are located in Nashik— which produces around 80 percent of India’s wine, and is called the country’s wine capital—followed by Sangli, Pune, Solapur, Buldhana and Ahmednagar.
According to Jagdish Holkar, president of the All India Wine Producers Association, wine manufacturers had accepted the excise duty, as the state government had assured them that the incentive scheme (WIPS) would be restarted. “We need such financial support from the government for the next ten years,” he said. “After that, we will be in a position to give substantial revenue to the state exchequer.”
Holkar stated that the state government was expected to think progressively and not about party politics. “They should think about the grapeproducing farmers—as grapes are a perishable commodity— as well as small wineries and development of an industry,” he said. “Once established, we will help in rural development and improving the economy, as we will be able to contribute revenue to the state. Ironically, other states such as Uttar Pradesh, West Bengal, Kerala, Himachal Pradesh, Madhya Pradesh, Karnataka, Mizoram and Meghalaya have started implementing the incentive policy started by Maharashtra, but in Maharashtra we are moving backwards.”