Storm in a bottle

Ashraf has levelled the following corruption charges,adding that the excise department often bypassed him to get orders signed directly by the Chief Minister:

* Indian Made Foreign Liquor (IMFL) companies/ suppliers were given six per cent overheads over and above the estimated cost by the excise department. The move,which entailed a loss of Rs 84 crore to the state exchequer,was given in lieu of kickbacks,says Ashraf,adding that he first drew the CMs attention towards the matter in a nine-page letter on January 14.

* Excise department officials went against his instructions and sold off six quintals of molasses to other states. On the other hand,the department ordered the purchase of molasses from other states. Ashraf alleged that bureaucrats in the department connived with the liquor mafia to mint money and thus caused crores of loss in revenue. Moreover,as the state possesses the capacity to store nearly 12 lakh quintals of molasses and the state receives revenue of 12.5 per cent by way of VAT from the spirit produced from molasses,he questions the rationale behind selling off the molasses.

* Ashraf says he faced undue pressure from department officials right from Joint Commissioner R L Sahni,Commissioner N Vijaylaxmi (transferred after the initial furore) and Secretary Amir Subhani to go in for bottling of country-made liquor. The new excise policy announced by the state envisages the setting up of one country-made liquor shop for every three panchayats.

A 200 ml liquor pouch costs Rs 11.30 whereas an 180 ml bottled liquor costs Rs 16.60, says Ashraf,explaining that there was no need to go in for bottling of liquor particularly since the state s last experience with bottled liquor (introduced for six months in 2007) had led to the revenue dipping from 87 to 57 per cent. I later realised that bureaucrats were trying to favour certain bottling units by starting bottling of liquor under the Bihar State Beverages Corporation Limited (BSBCL), he alleges.

* Ashraf also asks how two defaulter companies Rawati International and Spicy Beverages having outstanding dues of Rs 56.88 lakh and a penalty of Rs 34.41 lakh levied by the excise department,had managed to get away with filing wrong affidavits to secure the contracts. No punitive action was taken against then when the anomaly in their affidavits was discovered.

* Three companies Saraya Distillery (UP),Welcome Distillery (Chhattisgarh) and Umeri Distillery (Orissa) were awarded a contract although they did not meet the criteria of possessing a minimum bank deposit of Rs 35 lakh,mandatory for getting the bottling contract for a district. I personally procured the bank statements of these companies and found adequate money was not deposited in their accounts to get contracts. This must have been done under mafia pressure, he says.

* The department seldom tried to seal thousands of rural country-made liquor shops running without any licence. The department had given licences to approximately 5,000 shops,while nearly 15,000 unlicenced shops continued to operate. This resulted in annual revenue loss of over Rs 1,600 crore.

Responding to Ashrafs letter,the Chief Minister said an inquiry by Chief Secretary Anup Mukherjee had found the charges to be baseless. Thanks to the new excise policy,the excise revenue rose from Rs 320 crore in 2005-06 to Rs 750 crore in 2008-09, says the CM,adding that several proposals could not be implemented because of Asrafs objections.

The point-by-point rebuttal by the Chief Secretary says:

* There is no irregularity in molasses export as it was sold on prescribed government prices. Molasses was sold to other states so that the revenue earned could be used to meet the requirements of spirit by Bihars distilleries. Sugar mills have an estimated molasses production capacity of 23.23 quintal as against a storage capacity of 12.93 quintal.

* Distillers from outside the state were invited for bottling contracts after Ashrafs permission,claims the report. However,it does not explain why three companies were given the contract despite not having the minimum bank guarantee,as alleged by Ashraf.

The report says Ashraf did create hurdles in approving a bottling plant despite a proposal put forward by the department. Despite the CM approving sale of bottled liquor in the larger interest of the state,the minister did not approve it,it says.

On Ashrafs contention of the state generating more revenue without bottling country-made liquor,the report says: Prohibition is as much a part of excise policy. Liquor is not an essential commodity like grains and the government does not intend to avail cheaper liquor to the poor. Moreover,liquor in a plastic sachet is fraught with danger of adulteration.

* On the two defaulter companies,the report concedes that Rawati International had outstanding dues of Rs 56.88 lakh but added that the company had paid the amount in February this year. It adds that a penalty was levied against Spicy Beverages,as alleged by Ashraf.

Dismissing the report as superficial,Ashraf has sent a fresh letter to the CM to get the matter investigated by an independent agency.