On the very day the government allowed the reopening of liquor shops in non-containment zones, the electronic, print and social media was abuzz with stories of long queues to get a bottle of alcoholic beverage. In many places, the police had to get the shops closed due to the rush on shops and social distancing not being followed.
In most of the states, liquor shops opened after a period of almost 40 days. Almost all the state governments were in a hurry to open these shops as 20-30 per cent of the state’s own tax collection comes from excise on alcoholic beverages, and it is the second-largest source of revenue after petroleum.
Many moral guardians and media personalities asked why people are rushing for purchase liquor, and why the government opened these shops in the first place. But the right question to ask here is, why liquor can not be delivered online in our country despite the fact people are ready to purchase and this would also contribute a huge sum to government revenues.
In the 40 days of the lockdown period, the state governments across the country have lost around 30,000 crore rupees in excise revenues because no state has a sophisticated home delivery system through online orders, despite the fact that it could have been easily delivered to homes like any other essential item.
Confederation of Indian Alcoholic Beverage Companies (CIABC), the apex body of liquor sale companies, has written to Ministry of Commerce, Ministry of Health, as well as many state governments, to allow online sale of liquor. The letter written to the Ministry of Commerce emphasized the government should consider “institutionalizing home delivery as a separate channel administered online.”
“Factory warehouses hold stock, trucks are stranded, distribution warehouses are locked with stock and retail shops sit on unsold stock. The industry which contributes almost Rs 2-lakh crore by way of various taxes, sustains livelihood of nearly 40 lakh farmers, and employs nearly 20 lakh people directly and indirectly is in dire straits,” added the letter written by CIABC director-general Vinod Giri to Minister of Commerce Piyush Goyal.
Many entrepreneurs tried successfully in the online delivery of liquor at a nominal fee, but the mighty Indian state, drunk with power to curb entrepreneurial spirit, came to cull these initiatives.
In Karnataka, HipBar successfully completed the pilot project of online liquor delivery but the state refused to give license to them to launch this on a commercial scale.
Similarly, in 2016, two Chandigarh youths — MBA-pass out Anurag Awasthi who worked for a Delhi IT firm; and the other an engineer, Pratham Gupta, a technical analyst with Infosys in the city — set up gettalli.com, to deliver online liquor, but instead of awarding them and helping them with initiative, the city administration booked them under criminal charges.
Liquor is a state subject, but the apathy of states towards formalizing an online sale of a consumer product which is milking cow for them in terms of taxes is pathetic.
In 2018, the Maharashtra government under the Fadnavis administration took the first in the direction of allowing online sale of liquor. “The main objective is to reduce growing cases of drunken driving due to which there have been many accidents and resulted in great loss of lives,” said the then Minister of State for excise Chandrasekhar Bawankule, but as the government was ousted of power, the reform was put in the refrigerator.
During the lockdown, when the revenue from petroleum- the other major source of revenue for states- was dilapidated, liquor sales could have filled their coffers. As seen in the case of Delhi, where the Kejriwal government put 70 per cent additional tax on liquor and still a queue of customers is getting longer, various states including Delhi could have earned extra had they allowed the online sale of liquor or developed a sophisticated system for online delivery earlier by not showing apathy towards startups such as Hipbar or gettalli.com.
The Indian states, as well as the central government, are still stuck in license-quota raj, thanks to our lethargic and cunning bureaucracy. And this harms people, government revenues, the entrepreneurial spirit and economic growth of the country. The state governments must collaborate with Union ministries to allow online sale of liquor.
