Karnataka, which had set a fiscal target of Rs 22,700 crore from excise this year had suffered losses due to the COVID-19 lockdown.
The coronavirus-hit economy of Karnataka received a major relief by allowing the sale of liquor, as it recorded total sales of Rs 2146.48 crore since May 5, says a report by Mint.
The state’s excise revenue is Rs 1387.20 crore, said the report citing information by the department.
The amount of money received from the sale of liquor has helped the state to shore up revenues and make up for the shortfall to help revive its fledgling economy.
Karnataka is reeling under an acute fund crunch due to reduction in share of central taxes and the economic uncertainty that came with the coronavirus-enforced lockdown, the report suggested.
In the first two phases of the nationwide lockdown, the liquor shops remain closed. However, in a big relief to tipplers, the Karnataka Excise Department allowed the sale of liquor outside the containment zones at the retail shops from May 4 when the third phase of the lockdown came into force.
The cash-starving BS Yediyurappa-led state government allowed sale of liquor with an increased duty amount by 17 to 25 percent to overcome the fund crunch. Liquor is one of the few sources of income that remains with the state in the new goods and services tax (GST) regime.
Soon after the state allowed opening up of liquor shops, it started cashing in on the pent up demand. Initially, the order allowed to open only select MRP (maximum retail price) stores, which later extended to bars, hotels and other establishments to clear off its liquor stocks, said the report.
Karnataka, which had set a fiscal target of Rs 22,700 crore from excise this year, suffered losses due to the COVID-19 lockdown, said the report. However, the hike in duty on alcohol is estimated to bring in over Rs 2,000 crore to the state, said the report citing the excise department.
