For 40 days and nights, the ‘Gujarat Model’ had been successfully implemented across India. Then, on the 41st day, following a Ministry of Home Affairs circular, the red, green, and orange coronavirus zones parted like the Red Sea — for India’s tipplers to make way to the alcohol shops.
Standalone liquor shops in India reopened Monday after nearly six weeks of lockdown — but no one expected that they would be the engine of India’s economic revival. Excise duty on alcohol makes up a third of any state’s tax revenues — for states such as Karnataka, West Bengal and Uttar Pradesh, the income from alcohol is even higher.
No wonder then that India witnessed liquor sales worth crores of rupees on the first day of the shops reopening since the nationwide lockdown came into force on 25 March. It also saw social distancing rules being flouted, people lining up till kilometres, mugs replacing masks, coconuts being broken and people performing aarti in front of stores, high ‘corona’ taxes being levied, and shops being shut down by the police. Now, the Supreme Court has favoured the proposal of alcohol home-delivery but left it upon the states to take the final call. And Zomato wants to home-deliver liquor. All this in one week. And that’s why alcohol is ThePrint’s Newsmaker of the Week.
Not to mention, this week also saw a big surge in India’s coronavirus cases.
In high spirits
India has a drinking problem. Between 2010 and 2017, alcohol consumption jumped by 38 per cent in India. And in 11 years (2005-16), it more than doubled. It also leads to nearly three lakh deaths in India each year, according to the World Health Organization.
But liquor sales add significantly to each state’s own tax revenue. Duties levied on alcohol make up 10-15 per cent of a state’s tax revenue, not including prohibition states such as Gujarat and Bihar, according to a Reserve Bank of India (RBI) report.
With state coffers drying up due to the coronavirus crisis, the lockdown and the Narendra Modi government slashing states’ share in central taxes, opening alcohol shops was also a way to add quick, easy money. And add money, it did. On day one, Uttar Pradesh sold Rs 100-crore worth of alcohol. Delhi’s 70 per cent ‘corona tax’ on liquor didn’t deter buyers from making a beeline to the 150 government-run shops. The national capital usually makes Rs 3,500 crore per month from liquor sales. Karnataka made a record sale in a day — Rs 197 crore on Tuesday.
The sales and revenue have left many in high spirits after an April in the economic doldrums.
A man in Delhi was seen showering rose petals on those who had queued up to buy alcohol. “You are the economy of the country. The government has no money,” he said. Touché.
While it is easy to forget the coronavirus crisis in high spirits, many Indian states also realised this week that opening alcohol shops was not very practical to keep a pandemic at bay. So, some controls had to be implemented.
In New Delhi, crowds were lathi-charged by the police to disperse them. Haryana implemented a Covid-cess; Karnataka is planning a 5-15 per cent Covid-tax; West Bengal has imposed 30 per cent tax on MRP; Andhra Pradesh, 75 per cent; Maharashtra is also thinking of hiking tax on liquor now.
Apart from this, several states are also considering delivering liquor to homes to reduce the risk of alcohol shops becoming coronavirus hotspots. This plan even has Supreme Court backing. On Friday, the court, addressing a PIL on alcohol sales, said, “We will not pass any order but states should consider home delivery or indirect sale of liquor to maintain social distancing.”
According to Reuters, food delivery aggregator Zomato has already submitted a proposal.
But not everyone is happy with the steady flow of liquor again. Women in Uttarakhand protested the move, saying it will take a toll on already-low household incomes, joblessness and the family. Rights activists have said opening liquor shops will add to domestic violence against women, which had already increased during the lockdown period.
Whichever road India takes now to the oasis of alcohol, it will have a hangover effect. It can both lead to a spike in Covid-19 cases and increase state revenue.
A month ago, India was Googling ‘how to make alcohol at home’. In the last one week — the fuel of the locked-down economy’s engine has kept everyone in India — from treasurers, bureaucrats, chief ministers to police, families and liquor shop owners — awake.
“Alcohol is the anaesthesia by which we endure the operation of life,” George Bernard Shaw had once said.
For now, India is seeing its glass half-full.
Views are personal.