Lockdown 3.0: How much revenue have states earned from liquor sales?

In the most unlikely scenario, alcohol has become the talking point in India in the middle of the COVID-19 pandemic. This happened after the Centre released new guidelines on May 1 which allowed the sale of liquor across states should the State Governments decide on it. This has been leading to heavy crowds and long queues in front of liquor stores in many states. 

In order to prevent overcrowding at shops, State governments of Delhi, Andhra Pradesh, and West Bengal increased the tax on liquor: the Delhi Government imposed 70% tax, Andhra Pradesh government imposed a 50% hike and West Bengal imposed an additional 30% sales tax. However, the states are set to gain as the liquor sale is expected to bring revenues to the state coffers. 

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What is the liquor economy? 

According to a study by Fitch Group company and a research firm Indian Ratings & Research, states like Himachal Pradesh, Meghalaya, Sikkim, Karnataka, and Rajasthan earn more than 20% of their state revenue from liquor sale. 

In a study by the Social Justice and Empowerment Ministry in collaboration with the All India Institute of Medical Sciences (AIIMS), Chhattisgarh, Tripura, Punjab, Arunachal Pradesh, and Goa were found to be some of the highest alcohol consuming states. The impact of the liquor economy on state revenues was observed on May 4 when states earned record profits. 

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Here’s how much each state has earned in revenue from liquor sales so far: 

UTTAR PRADESH:  The state of Uttar Pradesh earned Rs.100 crore on May 4. 

KARNATAKA: The state of Karnataka gets more than 20% of state revenue from liquor sales and on 4 May, the state earned more than Rs 45 crore revenue on the first day of lockdown 3.0 with the sale of 3.9 lakh liters of beer and 8.5 lakh liters of Indian made liquor. On 5 May, the sales hit a record high of Rs.197 crore. 

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MAHARASHTRA: Maharashtra government earned Rs.11 crores from liquor sales on 4 May and Rs.62 crore on 5 May. 

ANDHRA PRADESH: Andhra Pradesh which earns 10-15% of state revenue from liquor sales earned Rs.68.70 crore on 4 May

DELHI: Delhi earns 14% of the total revenue of the state from alcohol and it reportedly Rs. 645 crore loss in revenue due to the lockdown. 

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