Amid states’ revenue loss, sale of alcohol should be allowed

An evening drink may be relaxation for many—and a vice for others. But alcohol is not just about morality; it is also a big business and a huge source of revenue. India being one of the largest alcohol markets in the world, its sale contributes about one-fifth of the total state revenues.

So, while you might have a hearty laugh when you get those jokes on how people are miserable with the ban on alcohol sale, the state authorities, which are dependent on the money earned from liquor sale, are worried as their revenues have dipped to a never-before level posing serious challenges for states. The state fiscal deficit could be above 3 per cent in the coming year, a study by the State Bank of India said.

According to the Confederation of Indian Alcoholic Beverage Companies, Indian Made Foreign Liquors or IMFL alone contribute Rs 1 lakh crore annually to government coffers.

As liquor shops have remained shut since March 25, when the national lockdown was imposed, states have already lost several thousand crores of revenue.

Besides, about a million people are engaged directly and indirectly in industry.

While sale of liquor is a state subject, the Centre has directed all shops selling alcohol to remain shut.

According to the SBI report, states presented their respective budgets beginning February “oblivious to the looming threat the coronavirus posed to the entire world, including India.” “The recent state budgets numbers will undergo massive revisions owing to these circumstances,” the report said.

Sample this: According to statista.com, in the financial year 2016, Tamil Nadu was the Indian state with the highest alcohol revenue at about Rs 30,000 crore. (<a href="https://www.statista.com/statistics/698036/states-with-highest-alcohol-revenue-india/">https://www.statista.com/statistics/698036/states-with-highest-alcohol-revenue-india/</a>).

The revenue from alcoholic drinks in the country was more than $67 billion in 2018. “Despite its uses for medical purposes in Ayurveda, the cultural diversity in India makes alcohol a controversial commodity in the country,” the website said.

States barring those where alcohol sale is prohibited such as Gujarat and Bihar among others, have been severely hit by the ban.

It is important to allow these shops to open at the earliest. It is not a joke, as many are making it out to be. At this juncture, the government can well do without messing up its fiscal situation further..