K'taka earns Rs 3,400 cr from excise

The Karnataka government has earned a revenue of Rs 3,440 crore in 2005-06 from state excise duty, exceeding the budget estimate of Rs 3,025 crore. State excise duty is levied on alcohol.

"We were able to generate an additional Rs 400 crore revenue because of reforms and implementation of rules in an effective manner. This has prompted us to fix a target of Rs 4,030 crore for 2006-07. We are hopeful of achieving the target," deputy chief minister B S Yediyurappa, who holds the portfolios of finance and excise, told reporters here recently.

The reforms were introduced last July and mainly consisted of asking bidders for excise licenses to deposit Rs 50 lakh as cash and execute a bank guarantee to the extent of three months' sales. This has ensured proper collection. Earlier, bidders sought licence in the names of others with a solvency certificate from the tahsildar and sometimes partly defaulted.

"This year too we will be implementing the rules strictly. Any contractor, who deviates from the rules, will lose his licence," he stated. This year there is already good response among bidders for registration, indicating that there will be greater competition during bidding and likely higher winning bids.

The auction of excise licence is taking place between May 25 and June 30. "We hope to raise a substantial amount by auctioning the licences," he added.