Revenue Vs Chaos At Liquor Shops During Lockdown: The Difficult Trade-Off

The long and unending queues at liquor stores in various parts of the country on Monday, led to some chaotic scenes in some places as well. In Delhi alone, four liquor shops had to be shut down after unruly mobs turned violent and had to be dispersed by the police.

The problem of keeping liquor shops open during the pandemic of the scale of coronavirus the country is currently witnessing, and to ensure social distancing in these places, is a major challenge as was seen on Monday in many places. The big question now is, how will state governments manage to control the chaotic scenes at liquor and tobacco shops while checking the spread of COVID-19.

Serpentine queues outside liquor stores were seen in various parts of Karnataka, UP, Delhi, Mumbai and elsewhere in the country. It is very evident to all as to why opening up of the liquor stores was so important to so many states—excise revenues from liquor sales constitute a major chunk of the economy of most states.

Take the case of India's most populous state, Uttar Pradesh. The state earns around Rs. 36,000 crores annually through excise revenue on liquor sales. On Monday alone, UP registered earnings of over Rs. 100 crore, according to estimates.

If the liquor tap is turned off, as it had been during the lockdown period, and as it continues to be in many parts of the country, revenues for states inevitably dry up. Given the unprecedented economic crisis following the outbreak of the COVID-19 pandemic and the ensuing lockdown, excise revenues of states have evaporated.

The opening of liquor stores on Monday, therefore, came as a welcome relief to tipplers and state governments alike. The flip-side, however, is that no social distancing was maintained at liquor and tobacco outlets in many places. Worse, there was chaos in many points which led to police having to step in to disperse crowds.

Experts say that the gains made by India over the past six weeks or so, through a stringent lockdown would have been lost to some extent, through such crowding at liquor outlets in many parts of the country. The big balancing act for states now is to keep the threat of transmission of COVID-19 at bay while keeping the wine shops open and the cash registers ringing.