Liquor ban costs States Rs 24,460 crores

New Delhi: Alcohol withdrawal symptoms have been on the rise, ever since the nationwide lockdown brought shutters down in all liquor shops.

But the government is having a far harder time adjusting to it than those who simply want to get tipsy.

While for the users, it is just a question of their usual drink, for different state governments in India, it is pure revenue with which salaries are paid and projects are okayed.

In the last 36 days of the nationwide lockdown, the states collectively have lost an estimated revenue of an over Rs 24,000 crore due to no liquor sale.

In 2019, the Centre used to get 2.48 trillion rupees a year in excise duties, according to industry body International Spirits & Wines Association of India (ISWAI). Keeping that as base, the States have lost a whopping Rs 24,460 crore in a little over a month's time.

Given that the shutdown is certain till May 3, they will lose an estimated total of Rs 27,178 crore.

The States earn through the state excise duties and also have a virtual monopoly on VAT. Precisely for this reason, liquor and petrol are kept out of the GST, so that States can milk this and fill their coffers which in turn can be used for helping farmers or paying salaries to government employees.

Some states earn as much as 20 per cent of their revenue from selling liquor alone. No wonder then, that the states are feeling the pinch.