Alcohol consumption dips in Kerala, but govt rakes in the revenue

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Thiruvananthapuram: Even when the alcohol consumption has been steadily declining for the past five years in Kerala, the government is registering an increase in the revenue made from liquor sales every year, according to the finance department committee’s report.

The committee pointed out that the increase in price has led to lower consumption and rise in revenue. It said that if the tax is further increased by 50 per cent, the government would make an additional annual revenue of Rs 4,580 crore. Also, the price rise would further cause the consumption to dip and bring in a practice of drinking small amounts of alcohol.

The liquor sales dropped by 5 per cent in five years. The government revenue comes from sales tax, excise duty, gallonage fee, and licence fee. For a Rs 100 sale, Rs 85 goes to the government as tax.

Data from the last 12 years point that 23.7 per cent of the state’s own tax revenue was from liquor sales.

Thirty-seven per cent of the males in the 15 to 49 age bracket consume liquor, according to the National Family Health Survey (NFHS). About 53.8 per cent of those who consumed alcohol were business people or those who worked in the government or private sectors.

As per the 2010 census, 40 lakh people in Kerala consumed alcohol. While 65 per cent depended on bars and beverage outlets, 30 per cent drank at home. This will come up to 12 lakh people. 

Therefore, bringing in a system of home delivery of alcohol would benefit this many people. If a membership fee, from Rs 100 to Rs 500, is levied from them, Rs 1,872 crore would reach the treasury.

The government got Rs 11,709 crore from liquor sales last year. When the sales tax was increased by 35 per cent in May, the price rose by 11 per cent. The average price of a bottle increased by Rs 80.

However, the price of alcohol is estimated to be less when compared to neighbouring Tamil Nadu. 

By factoring in these points, the committee has recommended a 50% increase in the sales tax and excise duty for all alcohol other than beer, wine and imported foreign liquor. This hike is mooted for one or two years until the government pulls out of the financial crisis.

Brandy tops the list of sales

Brandy - 20.51%

Beer - 18.46%

Rum - 17.30%

Vodka - 1.70%fore

Whisky - 0.77%

Wine - 0.43%

Foreign liquor - 0.07%

Gin - 0.02%