Tamil Nadu government jacks up liquor prices to boost coffers
, ET Bureau|
Updated: Oct 12, 2017, 10.13 AM IST
CHENNAI: The Edappadi K Palaniswami-led government decided to hike liquor prices in the state at a Cabinet meeting on Wednesday. It is also preparing to increase the salaries of government employees and continue with the plethora of subsidy schemes too.
A 180-ml alcohol bottle would now be costlier by Rs 12, while the price of beer would go up by Rs 10, an official with the state liquor retailing company TASMAC said. "The state will earn Rs 2,250 crore more (annually) because of the move," the official said. Economists termed this move as an at tempt to make up for the shortfall in revenue created by the higher salaries.
This comes at a time when the government has set up a committee to study the modalities to implement the recommendations of the Seventh Pay commission, which will benefit lakhs of government employees, including teachers who have been on the warpath for hikes. The government announced on Wednesday that minimum wage for government employees will jump 2.57 times and that it will benefit 12 lakh workers and 6 lakh pensioners, incurring a Rs 14,719 crore expense.
"The fiscal deficit is very high.The state has said it might have to violate the Fiscal Responsibility Rules for the first time. There are a lot of demands such as higher pensions for government employees, and there would be implications of the Seventh Pay Commission. So, to augment revenue, the easy way is through TASMAC [Tamil Nadu State Marketing Corporation]," said KR Shanmugam, an author at Madras School of Economics.
The move, however, drew criticism from MK Stalin, DMK's working president.
A 180-ml alcohol bottle would now be costlier by Rs 12, while the price of beer would go up by Rs 10, an official with the state liquor retailing company TASMAC said. "The state will earn Rs 2,250 crore more (annually) because of the move," the official said. Economists termed this move as an at tempt to make up for the shortfall in revenue created by the higher salaries.
This comes at a time when the government has set up a committee to study the modalities to implement the recommendations of the Seventh Pay commission, which will benefit lakhs of government employees, including teachers who have been on the warpath for hikes. The government announced on Wednesday that minimum wage for government employees will jump 2.57 times and that it will benefit 12 lakh workers and 6 lakh pensioners, incurring a Rs 14,719 crore expense.
"The fiscal deficit is very high.The state has said it might have to violate the Fiscal Responsibility Rules for the first time. There are a lot of demands such as higher pensions for government employees, and there would be implications of the Seventh Pay Commission. So, to augment revenue, the easy way is through TASMAC [Tamil Nadu State Marketing Corporation]," said KR Shanmugam, an author at Madras School of Economics.
The move, however, drew criticism from MK Stalin, DMK's working president.
