The WIPS was introduced in 2009 to promote Maharashtra’s wine industry and help the grape farmers to earn more but the scheme was abruptly stopped in 2020 with no updates, resulting in financial tightness but the producers are soon to get the backlog, and more importantly, the schemed paused in 2020 during the COVID-19 pandemic will continue for another 5 years.

The scheme was introduced through the department of industries. The subsidy given to the producers primarily to help the farmers earn more money was based on the VAT paid for sales in Maharashtra (wine and all alcohols are outside the ambit of GST in India) which is 20%. Producers received 80% of this as subsidy; thus 16% was returned at the end of the year- ostensibly, this was made a 6-month affair later. It had been going on fairly smoothly till its suspension.

The State Cabinet, on 4 January , not only allowed the revival of the scheme but also approved the rebate refund for wineries for the past four years: 2020–21, 2021–22, 2022–23, and 2023–24. According to our sources, the Minutes will be approved in the weekly cabinet meeting next week after which a GR will be issued; a sort of Gazette Notification and after that the process of refunds will start.

All India Wine Producers Association (AIWPA) has been spearheading the refunds in that they coordinated with the authorities on the disbursements in a fair and equitable manner. The refund is very orderly and generally the producers are quite satisfied, the minor delays due to fund shortage, at times notwithstanding. Smaller producers are given a priority in disbursement-for instance, the refund of Rs. 10 Lacs are given priority for the refund before the bigger producers get their turn

Sula the biggest beneficiary

Jagdish Holkar, President of AIWP, who has declared its mission of making the Indian wine industry a Rs. 5,000 crore industry by the year 2026, feels Sula will be the biggest beneficiary of this scheme. According to his calculations, wineries cough up about Rs. 70-80 Cr towards VAT for sales in Maharashtra annually, Sula represents about 50% of this amount and will thus get a refund of Rs. 30-40 Cr for each of these 4 years and a windfall of appx. Rs. 90-115 Cr.

It is not clear if the traded company had declared it as the receivable and taken into account in its balance sheet, but the company stock jumped up by around 12% to Rs. 564 before settling at Rs. 556, the highest gain it garnered since Sula went public in December 2022.

Farmers to be benefitted indirectly

Although the producers are not required to share the subsidy of 16% on VAT with farmers directly, the latter will be benefitted indirectly. Ashwin Rodrigues, Secretary of the newly formed Wine Growers Association of India (WineGAI), who is considered a medium-sized producer growing fast, is happy for himself and the members. ‘We don’t know about Sula as it is their internal matter, most of the small producers did not take the subsidy in their books of accounts as receivable because, after the policy was scrapped, we did not want to be liable for payment of income tax before getting the benefit. So it is really a windfall for us.’

On whether it would help the grape growers, he is emphatic that farmers would definitely benefit from this largesse. The producers are not going to invest this money in another business. ‘Grapes are the biggest cost factor in wine production. Shiraz sells for Rs. 60 a kg while it used to fetch Rs. 15 a kg a few years ago. The money we get will be ploughed back into the business which is growing very well right now, thank you. You can bet the grape prices in the next couple of years will go up in Maharashtra, benefitting.’

One can only hope that the consumers get some reprieve in the rising sales prices of these wines, feels DelWine.

Helping hand from the government

The vagaries of the wine industry in India are too numerous to predict the growth. Market is too dependent on government controlled factors. This is a clear example of thawing in the attitude of the governments and Maharashtra has taken a lead in sympathizing with the producers and understanding their problems. One needs to constantly interact with them and share the benefits with the farmers, economy and the consumers-at-large.

DelWine salutes the government of Maharashtra and commends the work being done by the two Associations- AIWPA and WineGAI.

Subhash Arora