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LATEST NEWS UPDATES | Liquor lobby bets on NREGS to fuel rural thirst by Jinka Nagaraju

Liquor lobby bets on NREGS to fuel rural thirst by Jinka Nagaraju

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published Published on Jun 10, 2010   modified Modified on Jun 10, 2010


The National Rural Employment Guarantee Scheme (NREGS) has had an unintended side effect: a record rise in the consumption of Indian Made Foreign Liquor (IMFL) among poor rural families, all thanks to the unprecedented sums of money that the scheme placed in their hands. And the politico-realtor lobby’s record bids for the two-year liquor licences across AP on Monday appears to be in the hope of reaping a bumper harvest from this rural ‘cash crop’.

In the auction for 6,596 liquor outlets, it was the rural districts that registered huge bids. Mahbubnagar and Anantapur — considered backward and from where people migrated for work but now beneficiaries of NREGS — witnessed huge jump from the previous bids. Mahbubnagar fetched Rs 132 cr (Rs 54 cr two years ago) while Anantapur raised Rs 200 cr (Rs 96 cr). In contrast, the difference between the two bids in an urban district such as Hyderabad was minimum — Rs 250 cr this year compared to Rs 186 cr earlier.

“A retailer would not have bid as much as Rs 5 crore for one outlet unless he is sure of making double his investment in two years. This could be done by increasing the number of belt shops or selling at a higher rate than the MRP,” an excise official said.

Ever since the nation-wide scheme was launched in Feb. 2006 from Anantapur, AP has stolen a march over other states. Under NREGS — meant to guarantee 100 days of rural employment — each person is assured of Rs 135/day for four hours’ work, which includes laying of roads, tree plantation, irrigation and flood control. The state, which got Rs 6,500 crore in 2009-10, has been reportedly assured of a whopping Rs 10,000 crore for the financial year 2010-11. “Of this, Rs 1,012 crore was released on April 15. The remaining will be released in instalments,” an official said.

As a result of this bonanza, a rural resident of AP is flush with money. “On an average, we are spending Rs 200 crore a year under NREGS. And each family earns a minimum of Rs 6000 to Rs 10,000 a month,” an NREGS official in Rayalaseema
told TOI.

The flow of ‘free’ money, essential commodities and electricity means most of the cash is ending up in purchasing liquor. “A majority of the rural population consumes alcohol. The past two years has seen an amazing number of illegal liquor outlets in the form of belt shops multiplying many-fold. And the demand of late has been only for IMFL, with whisky being the most sought after,” an excise official said.

Officially, the auctions netted almost Rs 7,000 crore for the state, with 70% of the bids from politicians or realtors.

With so much at stake, liquor in AP is set to flow faster than water to wet the parched throats of its farmers who even today struggle to whet the appetite of their farms for water.


The Times of India, 10 June, 2010, http://timesofindia.indiatimes.com/City/Hyderabad/Liquor-lobby-bets-on-NREGS-to-fuel-rural-thirst/articleshow/6030478.cms


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