Liquor ban costs states Rs 24,460 cr & counting. Relook on cards?

By Anindya Banerjee

New Delhi, April 29 (SocialNews.XYZ) Alcohol withdrawal symptoms have been on the rise, ever since the nationwide lockdown brought shutters down in all liquor shops. But the government is having a far harder time adjusting to it than those who simply want to get tipsy.

While for the users, it is just a question of their usual drink, for different state governments in India, it is pure revenue with which salaries are paid and projects are okayed. In the last 36 days of the nationwide lockdown, the states collectively have lost an estimated revenue of an over Rs 24,000 crore due to no liquor sale. In 2019, the Centre used to get 2.48 trillion rupees a year in excise duties, according to industry body International Spirits & Wines Association of India (ISWAI). Keeping that as base, the states have lost a whopping Rs 24,460 crore in a little over a month's time.

Given that the shutdown is certain till May 3, they will lose an estimated total of Rs 27,178 crore.

The states earn through the state excise duties and also have a virtual monopoly on VAT. Precisely for this reason, liquor and petrol are kept out of the GST, so that states can milk this and fill their coffers which in turn can be used for helping farmers or paying salaries to government employees. Some states earn as much as 20 per cent of their revenue from selling liquor alone. No wonder then, that the states are feeling the pinch.

This financial year, Punjab had a target of Rs 6,000 crore. But with the shutdown, forget meeting the target, the state is running financially dry. Punjab Chief Minister Amarinder Singh, in a letter, has requested the Union Home Ministry to give permission for reopening liquor shops in the state, citing drying-up revenue as a reason.

Punjab's Special Chief Secretary K.B.S. Sidhu told IANS, "It must also be mentioned that even the government is going to lose a very substantial part of its revenue, on a proportionate basis, which is budgeted to be Rs 6,000 crores for the full-year 2020-21."

Kerala, where multiple liquor related suicides took place, had allowed issuance of alcohol if government doctors certified that the applicant had withdrawal symptoms. However, many believe it was evaporating revenue that could have guided its decision. However, soon the Kerala High Court stayed home delivery of liquor while the bench of Justices A.K. Jayasankaran Nambiar and Shaji P. Chaly, coming down heavily on the state government and terming the decision as a "recipe for disaster".

This Saturday, Chief Minister Pinarayi Vijayan asserted, the state was going through a tough time due to bad financial position.

Even, BJP-ruled Karnataka was toying with the idea of opening liquor shops to ramp up its revenue collection that it needs badly, in face of tackling the coronavirus outbreak on one side and not getting the GST returns on another. However, with a clear advisory from the Union Home Ministry stating that liquor will not be permitted during the lockdown, Karnataka seems to have backed down.

BJP-ruled states like Haryana, Karnataka, Goa as well as opposition-ruled Kerala have reached out to the Centre, avoiding the official route, nevertheless seeking permission to sell liquor keeping strict adherence to social distancing norms.

Meanwhile, at least eight people committed suicide in Kerala due to non availability of alcohol. Two 32 year olds reportedly died in Uttar Pradesh's Fatehpur district after drinking spurious liquor, in absence of alcohol. In Karnataka's Belagavi, a man, frustrated at not getting his bottle of liquor during the lockdown, hung himself in his rented house.

While these incidents point towards a fixation with alcohol and how many Indians are feeling the heat of liquor shops being shut for more than a month now, in reality, it is the state governments who are running dry.

How badly do the states need revenue? Chhattisgarh Chief Minister Bhupesh Baghel sums it up, telling IANS that "from registry to transportation, mines and sale of liquor -- everything has stopped. The states have no revenue, and if things go on like this, we will not be able to pay salaries to the employees".

Does that mean the Centre may conditionally allow sale of liquor in certain parts, after May 3? Well, no one knows. But the centre is definitely under huge pressure to do so, from a number of Chief Ministers, given there won't be a complete withdrawal of the lockdown.

(Anindya Banerjee can be contacted at anindya.b@ians.in)

Source: IANS