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After Delhi’s ‘special corona fee’, many states hike liquor prices for much-needed revenue

The hike in liquor prices have resulted in a massive fiscal boost for states like Rajasthan, West Bengal and Uttar Pradesh.

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New Delhi: After the central government eased restrictions in the third phase of the extended nationwide lockdown, liquor shops in several states opened up Monday to massive crowds of people queuing up to buy alcohol.

Delhi, Uttar Pradesh, Maharashtra, Assam, Karnataka, Chhattisgarh and Rajasthan were among the states that allowed the sale of liquor. In Assam, liquor shops have been open since Saturday.

However, by Tuesday, many of the states had raised the excise duty on alcohol and now liquor prices are sky-rocketing.

The Delhi government levied a ‘special corona fee’ Monday evening, raising alcohol prices by 70 per cent. Andhra Pradesh soon followed suit and hiked the price of alcohol by 75 per cent through an increase in excise duty. In West Bengal, the price was increased by 30 per cent while in Rajasthan, alcohol became pricier by 10 per cent.

Given the huge scarcity of resources due to the coronavirus pandemic and the subsequent lockdown, this hike is not unprecedented. Excise duty on alcohol is the second or the third largest contributor to the tax revenue of states.

Also read: It’s alcohol and it’s Ayurvedic — how Kerala drinkers are beating booze lockdown

Alcohol sales give massive fiscal boost to states

States are, therefore, earning a considerable amount from the sales of liquor over the last two days.

Assam reportedly earned Rs 50 crore revenue in liquor sales till Tuesday. Andhra Pradesh recorded Rs 40 crore in liquor revenue on just the first day of reopening.

Karnataka, on the other hand, earned Rs 45 crore Monday and Rs 197 crore Tuesday. The state’s estimates for a day was Rs 54 crore before the lockdown. The government is also planning to impose an additional 5 to 15 per cent Covid-tax on alcohol.

Rajasthan had increased excise duty on Indian-made foreign liquor (IMFL) to 35 per cent and other liquor categories to 45 per cent last week. The state was losing Rs 41 crore per day because of the lockdown but is now expected to get Rs 800 crore in addition to the usual revenue of Rs 15,000 crore.

In Bengal, the increase in excise duty is expected to bring in an additional Rs 3000 to 4000 crore to the total revenue. Last year, the state earned 11,627 crore from liquor sale. The state recorded Rs 40 crore sale on the first day of the opening of liquor shops.

Uttar Pradesh has also announced an increase on the price of liquor depending on the different types of liquor — Rs 10 will be increased on 190 ml of quarter whereas premium alcohol bottle will see a rise of Rs 50 in price.

An official from the state’s excise department said that a sale of over Rs 100 crore was recorded Monday against the daily average of Rs 70-80 crore. Chhattisgarh government has not increased the excise duty on liquor, however, it has established a new portal to deliver liquor at homes in green zone.

Meanwhile, Haryana has also decided to impose a corona cess on liquor from Wednesday. The IMFL will be costlier up to Rs 50 and a cess of Rs 2 to Rs 50 shall be levied depending upon the brand. Punjab, on the other hand, is likely to announce a ‘special corona charge’ on liquor soon.

Also read: Raghav Chadha recalls Churchill on alcohol, Omar’s liquor wisdom, Chetan Bhagat’s `vaccine’ peg


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