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Panel smells scandal in alcohol distribution in Karnataka

In its report for 2010-11, presented in the assembly on Tuesday, the committee has pointed out glaring lapses in the functioning of KSBCL which is the sole distributor of liquor in the state.

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It was created to plug revenue leaks in liquor trade and improve the excise revenue. But the functioning of the Karnataka State Breweries Corporation Limited (KSBCL) has drawn the ire of the legislature committee on public enterprises as its irrational decisions have deprived the state exchequer of at least Rs974 crore excise revenue.

In its report for 2010-11, presented in the assembly on Tuesday, the committee has pointed out glaring lapses in the functioning of KSBCL which is the sole distributor of liquor in the state.

The government organisation has been authorised to have a 5% profit margin in its transactions with liquor manufacturers and wholesale and retail sellers. But surprisingly, the management board of KSBCL was found to have pegged its profit margin at just 2% for liquor producers, while fixing the prices of various liquors, resulting in a revenue loss of `8.21crore during 2004-07. This has been pointed out by even comptroller and auditor general of India in its report.

The committee has also pointed out that the KSBCL had earned a revenue of Rs1,750 crore during 2004-2010 and submitted Rs1,623 crore to the government as dividend. If KSBCL had fixed its profit margin at 5% as the state government had wished, its profits would have touched Rs2,612 crore, Rs862 crore more than what was realised.

Even though the state government’s order in 2003 had clearly fixed a limit on the profit margin of even wholesale and retail liquor sellers, the KSBCL, in its circular, mentioned its share of profit as ‘not exceeding 5%’. Surprisingly, the profit margin for wholesale and retail sellers was mentioned as 5% and 20%, respectively without the restrictive term ‘not exceeding’, which is in conflict with the state government’s order.

“Has the KSBCL monitored as to whether the retailers are selling liquor at the right price? Does it have any information or documents of irregularities in pricing of liquor being sold by retailers? What action has been taken on erring retailers?” the committee has asked in the report and further said that KSBCL had failed to provide a convincing reply to these questions.

The committee has recommended action against officials responsible for these lapses and stringent monitoring on retailers to check as to whether they are selling liquor only at the prescribed maximum retail prices.

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