With a cut in the minimum guarantee quota, the contractors will have to pay less to the government.

Days after imposing ‘Covid cess’ of up to Rs 50 per bottle on liquor, the Punjab government announced a major relief to the liquor contractors. Captain Amarinder Singh-led Punjab government allowed a relaxation of up to 20 per cent in the minimum guarantee quota for the sale of liquor from May 7 to June 30. The minimum guarantee quota is the minimum guaranteed revenue that the liquor licensee is liable to pay even if the licensee does not lift the quota allocated to the licence. With a cut in the minimum guarantee quota, the contractors will have to pay less to the government.

With a reduction in MCQ, the contractors will not have to pay the government the licence fee for the period of 11 days in MC limits of major cities, and a licence fee for 5.5 days for other parts of the state, a contractor told The Indian Express. The state government’s revenue is expected to take a hit of Rs 72 crore in the fiscal year for providing relief to the contractors, however, the government will garner Rs 145 crore from the Covid cess imposed earlier this week. This implies that the government will still have an overall profit of Rs 73 crore after giving relief to the contractors.

Also Read | Rise in jobs before pandemic: Unemployment rate fell in 2018-19; more women joined formal economy

After the Narendra Modi-led government announced a nationwide lockdown to arrest the spread of the coronavirus pandemic in March, the revenue of states saw a major dip. Consequently, many states including Delhi and Maharashtra allowed the sale of liquors to boost their revenue despite a high number of coronavirus cases. While some states have allowed home delivery of alcohol to ensure social distancing, others have introduced stringent rules to sell alcohol. However, the common fact among all states is that they have considered liquor as a trump card to boost revenue when the economic activity is subdued.