clxviii 



large distillery at Nellikuppam in the South Arcot district in connec- 

 tion with their sugar factory there and manufacture spirit cheaply from 

 molasses, would be able under the '' free supply " system to establish 

 a practical monopoly and then enhance the price of liquor unduly and 

 thus diminish the margin left out of the retail price for the Government 

 duty. Experience has, however, since shown that there is'keen com- 

 petition among distillers for the custom of licensed vendors in " free 

 supply " areas and that the danger apprehended is not likely to arise. 



16. There can be no doubt that since 1888-84 both the duty real- 

 ized and the price of liquor in excise districts have increased. The aver- 

 age duty for the districts in which the excise system was in force in 

 1883-84 was Rs. 3-2-6 per gallon of proof strength. In 1887-88 the 

 duty realized in the same districts was Ks. 4-8-3 per gallon, of which 

 Rs. 2-13-10 represented the duty levied at the still-head and Rs. 1-10-5 

 the incidence per gallon of the rents paid by vend farmers and shop- 

 keepers for the privilege of sale. The highest excise duty leviable 

 under law is Rs. 5 per proof gallon. For the current year the still- 

 head duty has been enhanced considerably in several districts and 

 therefoi'e a much larger portion of the taxation will be realized in the 

 shape of still-head duty than in 1887-88. 



17. To determine the effect of the excise system on consumption 

 of liquor, the circumstances of the several districts must be separately 

 examined. The following are the facts connected with each district : — 



Ganjam, exclusive of Agency tracts. — The consumption in 1875-76 

 was 38,849 proof gallons, in 1883-84 it had increased to 41,836 

 gallons. Since then it has been rapidly diminishing ; in 1886-87 it 

 was 24,579 gallons; 1887-88, 24,170 gallons; and in 1888-89, 24,044 

 gallons. The duty per proof gallon which was Rs. 1-15-0 had in- 

 creased to Rs. 3-11-9 in 1887-88 and to Rs. 3-6-4 in 1888-89. 



Vizagapatam, exclusive of Agency tracts. — The consumption in the 

 coast taluks of the district was 16,905 gallons in 1875-76, 11,227 

 gallons in 1883-84, 26,479 gallons in 1886-87 and 29,133 gallons in 

 1887-88. The increase in these taluks in the later years is entirely 

 due to the stoppage of smuggling from the inland taluks where liquor 

 was sold cheaply by the contractors under the renting system. Under 

 the old law the transport of spirit in quantities not exceeding one 

 quart was permissible and considerable quantities were thus trans- 

 ported from the rented to the excise taluks with a view to evade 

 the higher duty leviable in the lattei\ The Abkdri Act of 1886 has 

 enabled Government to put a stop to this practice by prohibiting the 

 transport of liquor in however small quantities from the rented to 

 the excise tract. The excise system having been introduced into the 

 interior taluks also from 1888-89, the consumption for the whole 

 district has declined from 68,472 gallons in 1887-88 to 36,323 in 

 1888-89. The duty realized in 1887-88 and 1888-89 was Rs. 3-4-10 

 and Rs. 5-7-1, respectively, per proof gallon against Rs. 2-10-0 in 

 1875-76. 



Goddvari. — No reliable statistics of consumption are available for 

 this district which has not yet been brought under the excise system. 

 In this as in other tracts in which the out-still system is retained the 

 consumption is very large, being 80 proof gallons per 1,000 of the 



