The re-opening of liquor shops has provided a much-needed fillip to the State government by generating excise revenue. As we continue to adapt to a new pandemic-induced reality, moving to an e-commerce model for alcohol will not only help fortify the state exchequer but also help prevent overcrowding at stores.
The ongoing COVID-19 pandemic has brought forth many unprecedented challenges, upending life as we know it. While the central and state governments across the country are working tirelessly to rein in the spread of the virus through varying degrees of lockdowns, it has also brought into the public discourse a slew of issues in its wake. Discussions abound on the categorization of essential commodities, the welfare of migrant laborers, mass testing of citizens and of late, the re-opening of liquor shops across the country, amid the rising number of cases.
The recent notification by the Ministry of Home Affairs, dated 1st May 2020, allowed the State governments to re-open liquor stores, providing a much-needed respite to a beleaguered state exchequer after 40 days of lockdown. But this move also generated serpentine queues of consumers outside these stores who paid no heed to social distancing, contrary to the very objective of the lockdown. It is pertinent to note that alcohol features under the State list in the seventh schedule of the constitution of India, thereby giving them complete autonomy to regulate the sale of liquor. And to tackle the problem, the governments introduced a variety of measures, ranging from levying additional tax on liquor to allowing home delivery of the liquors. While Delhi and Andhra Pradesh chose to impose a 70% and 60% COVID tax on liquor respectively and Karnataka hiked the prices by 17%. On the other hand, Punjab, Chattisgarh and West Bengal took recourse to home delivery of alcohol products. Whatever the course of action, it served one main objective: inhibiting overcrowding to stem the further spread of the novel disease.
The additional tax has not helped generate the intended results, however – people continue to queue up outside the stores, their determination to get their favorite tipple not ebbing despite the steep prices. What it has also revealed is that the one-size-fits-all approach to taxation is short-sighted and counterintuitive – why should beer or alcohol beverages with moderate levels of alcohol be taxed at the same rate as hard spirits? This flat tax rate model makes moderate alcohol beverages like beer inaccessible thus nudging consumers towards strong alcohol beverages, breeding the problem of alcoholism in the long run and giving rise to the sale of spurious and illicit liquor. Law makers should reconsider this decision in the larger interest of the health and well-being of its citizenry.
Closer home, the state of Karnataka has generated over Rs. 250 crores in revenue in just two days of the opening of liquor shops. An impressive number, especially for an economy battered by a pandemic. But as evidenced by the throngs of people outside stores, its priority should be to find the right balance between generating revenue and maintaining social distancing. The solution to this is simple - home delivery of alcohol products. Already adopted by states like Maharashtra, Punjab, Chhattisgarh and West Bengal, this will help fortify the excise revenue stream while providing consumers with a secure opportunity to get alcohol delivered to their doorstep. Especially in a state like Karnataka, where the rate of alcohol consumption is high, it is imperative to offer people the choice to get their desired alcohol beverage online or home-delivered.
A marketplace model could be created which would facilitate the delivery of alcohol after verifying the age of the buyer. Through e-commerce, products can be safely delivered in any area irrespective of the zone categorization of green, orange or red, while also encouraging transparency in the process of consumption.
Social distancing is here to stay. The need of the hour is to adapt to this new reality, by embracing solutions that move us forward in better and safer ways. The government should take adequate measures towards enabling and operationalizing a robust infrastructure for the online sale of alcohol. E-commerce is the future and during this pandemic, it is going to be our best hope.