With 45% national intake, southern states draw 15% revenue from liquor

The five southern states source 10 to 15 per cent of their revenue from excise duty on liquor but account for nearly half of the total consumption, says a report.

The financial position of these states is precarious as the coronavirus lockdown completely dried up this crucial liquidity tap for them in April.

The five southern states of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala together consume as much as 45 per cent of all liquor sold in the country, the report by Crisil said on Thursday (May 7).

“The denizens of this quintet quaff as much as 45 per cent of all liquor sold in the country annually. But not a drop was sold in April, and given the dire state of their revenues, these states have been anxious to make good the losses by opening up the vends,” it said.

While Tamil Nadu and Kerala top the list in revenue percentage terms at 15 per cent each, for Kerala the tax on liquor is its single largest revenue source.

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The revenue share is 11 per cent each for Karnataka and Andhra Pradesh and 10 per cent for Telangana, shows the report. Delhi is at number three when it comes to liquor revenue share with 12 per cent of tax revenue, but its citizens swig only 4 per cent of the national intake.

Tamil Nadu has another distinction — it is the single largest consumer of liquor in the country, guzzling as much 13 per cent of national sales, closely followed by Karnataka with 12 per cent.

Andhra quaffs 7 per cent of the national intake, followed by Telangana (6 per cent) and Kerala (5 per cent). While all other states have high population, when it comes to Kerala, despite being home to only 3.3 crore people, it draws the highest revenue because among the five states it charges the highest tax rate on liquor.

However nationally, Maharashtra charges the highest rate, but draws only 8 per cent of its tax revenue from liquor — primarily because it is the most industrialised state and has many other sources of income — and also consumes only 8 per cent of the national intake despite being the second most populous state.

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Twelve states — the five southern ones, Delhi, Punjab, Uttar Pradesh, West Bengal, Madhya Pradesh and Rajasthan — account for 75 per cent of liquor consumption in the country.

But uncorking the bottled spirit will also be a problem for these 12 states as they contribute to more than 85 per cent of all COVID-19 infections/deaths as well.

Maharashtra alone contributes 31.2 percent of all cases, followed by Delhi (10 per cent), Tamil Nadu (7.6 per cent), Madhya Pradesh (7 per cent) and Uttar Pradesh (5.9 per cent).

Among these 12 states, Kerala has the lowest national average in this at under-1 per cent, the report said. Maharashtra shuttered liquor vends in Mumbai and the rest of MMR region after opening them for a day earlier this week.