Tax hike fails to dampen liquor demand

nNEWDELHI:: A 70% corona cess on alcohol announced by the Delhi government did not appear to have an impact on demand in the Capital on Tuesday.

There were long queues outside liquor shops on the second day of the third phase of India’s Covid-19 lockdown, but the situation was not as chaotic as it was on Monday, when several outlets had to be shut because throngs of people violated social distancing norms required to contain spread of the deadly pathogen.

Delhi has so far reported 5.104 Covid-19 cases, including 64 deaths and 1,468 recoveries.

Of the 172 government liquor shops that opened after a 43-day hiatus on Monday, several in parts of south and south-east Delhi’s Govindpuri, Mandawli, Ashram and Kalkaji remained shut on Tuesday. Delhi Police officials said some had run out of stock, while others could not open because they did not have enough volunteers to ensure an orderly queue.

Like on Monday, customers on Tuesday started lining up from early morning, hours before the shops opened. In some areas, the wait was in vain because the Delhi government and the Delhi Police did not give details about which shops would open and which wouldn’t.

The Delhi government on Monday imposed a “special corona fee” of 70% of the MRP on all categories of liquor. The fee would apply at “70% of the maximum retail price of all categories of liquor sold through written licences for consumption off the premises,” read the Delhi government order, approved by the L-G.

In terms of income, alcohol accounts for around 14.1% of the city government’s total revenue projections for 2020-21. For 2020-21, the city-state projected a total revenue of around ₹6,279 crore through the sale of liquor, compared to the revised estimate of around ₹5,480 crore for the previous fiscal.

Delhi has a total of 864 liquor shops. Of these, 389 are privately owned, and other than the 172 stand-alone identified by the administration, the other government shops with L-6 and L-8 licences are either in markets or complexes. The L-6 licence allows a shop to sell foreign liquor and beer, while the L-8 licence is needed to sell country liquor. The government’s tax component depends varies from one brand to another; but it is the same for all private and government shops.

Compared to Monday, when the police needed to resort to lathi-charge in some areas to control the crowds, the intervention was minimal on Tuesday though force was used to disperse large gatherings in parts of Ghazipur.

“The situation on the streets was peaceful. The police got in touch with shop owners and ensured that people ensured social distancing. Shopkeepers were asked to rope in volunteers to help them in social distancing. At places where people were not following rules, they were advised and dispersed accordingly,” said Delhi Police spokesperson Mandeep Randhawa.

Excise department officers said that things worked in better order also because shop owners were warned that they would have to shut if they could not ensure social distancing. “The call to shut a shop can be taken by police and the district administration, based on the ground situation. Things will improve further from here on,” said an official who asked not to be named.

However, people did flout government guidelines in some areas. In outer Delhi’s Nihal Vihar, they started queuing outside a liquor vend from 5am; some spread bedsheets and mats on the ground, while those who had come in groups took turns to hold their position. At 9am, when the shops opened, there was rushing and crowding at the counters.

Delhi police officials stationed outside the store said that the crowd was dispersed, and the shutters had to be downed until the store was reopened at around 1pm. “There is no management here. The police are treating us as if we’re goons. We are paying money to buy alcohol. They should tell people to maintain distance,” said Dharmendra Singh Meena, who had lined up outside the store at 6.30am.

In Vasant Vihar, liquor shops in C-block remained shut on Tuesday after residents complained of large crowds on Monday. Although people started gathering outside the shop on Tuesday, there was police on hand to manage the situation.