CS Shweta Jain

India Lockdown 3.0 Covid-19: Opening of Liquor Shops over Temples- A Right Step

Today, when the fight with Corona Virus is getting intensified with every day, people are forced to be indoor amidst shutting of the shops, offices, manufacturing units and other place of working, the Government’s announcement permitting opening of Liquor Shop is a right step?

No mistake is done by the ruling machinery while dealing with the sentiments of the 1.30 billion people…. need to understand.

The kind of virus world facing up with is a communal disease, the spread is so casual and deep that very difficult to apprehend until symptoms emerges out significantly. In such case, opening of temples/mosques and other place of worship is like aiding the virus to spread its wings. Hence government is forced to keep all such religious places in shut mode keeping in mind that India is a land of emotions and superstitions.

But why when religious places off, majorly the places of occupations have to be on online mode, liquor shops been allowed to open? The Alcoholic’s plea worked on the government? Ruler felt pity onto them knowing non- essential, but how much essential?

Well, keeping aside the satire, let’s try to dig out the role of alcohol in the economic growth. Is booze really a pillar to economy in the times of crisis?

It is surprising to note that India is the largest liquor market in the world with increasing demand for imported whisky/ wine/ beer etc. The factors responsible for this graph are supposed to be modern approach, shift in lifestyle, monetary affluence, urbanisation and more & more social interaction, provoking and inducing youngsters to indulge into habit of drinking. The booze consumption in India is the steepest rises in the world, alluring foreign countries to come up with join venture proposals. According to the Wall Street Journal the average Indian drank 38% more alcohol in 2017 than in 2010. Across India when overworked livers decided to be on break by consuming less liquor, it has become sign of economic slowdown. But Why?

What is that corresponding relationship shared between alcohol and economy….

Alcohol plays a gargantuan role in our economy. Alcohol is germicidal, it kills virus. That’s the bare fact but not in support of drinking habit. Legally permissible age for drinking varies from one state to another. There is a concept of ‘Dry Day’ in the year viz Republic Day, Independence Day, Gandhi Jayanti & other days of national importance, when the sale of alcohol is prohibited. In India, States like Gujarat, Bihar, Lakshdweep and Nagaland have totally banned the liquor. As per Statista Report, the alcohol market in the country comprises of Indian made Indian liquor, Indian made foreign liquor, wine , beer and imported alcohol. Heavy duties and taxes make the imported alcohol a tiny player in the country’s alcohol market whereas beer and wine contributes 8%and 1% of share respectively. Whisky account for the highest sales volume, followed by brandy and rum.

Ø Not to be on surprise, alcohol revenue provides broad base to the government for paying off their bills. As per estimation, alcohol funds almost 1/5th of the state government budgets which is increasing with every day.

Ø The alcohol revenue has many heads in various departments such as excise duty, import fee, education cess, sales tax etc.

Ø The states like Delhi, Tamil Nadu, Kerala, alcohol business is owned and controlled by the government and thus revenue generation is easy to calculate.

Ø Alcohol business in Maharashtra is in private hands.

Ø In States like Andhra Pradesh, Orissa, Rajasthan, Uttarakhand government control the wholesale business and retailing is in private hands.

Ø “Liquor provides 20% of the share of the government’s own revenue in most States,” says Jose Sebastian, Associate Professor at Gulati Institute of Finance and Taxation, Thiruvananthapuram.

As per the domestic market overview-

  • Alcohol market value= INR 2.4 trillion
  • State with highest alcohol revenue = Tamil Nadu
  • State with highest beer consumption per capita(weekly) = Sikkim
  • Spending on alcohol, tobacco & such products = INR 1.8 trillion
  • Major players are United Spirits, United Breweries with income in FY 2019 as INR 90 billion and 66 billion respectively

As per Business Today, 30th April, 2020 the budget estimates of 16 big states (except Gujarat, Bihar) show that they had expected to collect Rs. 1.65 Lakh crores from tax on liquor in 2020-21 but with lock down these estimates will go down significantly.

Finally, we may conclude that with such major share and contribution in State Revenue, alcohol though carrying health hazard, is actually a panacea for economy. To look into the brighter side, the habitual drinkers shall consume and remain indoors in some way or other. It is the need of this hour to allow sale of liquor fetching hefty revenues in the government treasury box. Allowing sale of alcohol is just another weapon in the hands of government to battle revenu dip amid Covid 19. The positive side of alcohol consumption we hardly ever consider but given the facts, should we raise glasses this time to utter ‘cheers’ ?

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One Comment

  1. kuber92@gmail.com says:

    Also, with the increase in life expectancy of our countrymen because of improvement in standard of living and availability of medical facilities, liquor is of utmost importance to reverse the life expectancy; and in some form curb the population growth.

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