As the sale of liquor started on Monday due to relaxed nationwide lockdown, long queues were seen outside the stores in violation of social distancing norms.
Long queues outside liquor shops were a common sight on Monday as people queued up in large numbers after restrictions were relaxed from May 4 following 40 days of strict lockdown.
The Ministry of Home Affairs had extended the 40-day nationwide lockdown from Monday for two more weeks and allowed liquor and tobacco shops to open outside containment zones.
People queued up in larger number outside liquor stores, giving social distancing norms a toss at some places.
In Delhi, many shops had to be shut as people did not follow social distancing norms. In some cases, police had to use mild force to disperse the unruly crowd.
About 150 government-run liquor shops have been allowed to open from 9 am to 6.30 pm in the national capital in accordance with the latest lockdown relaxations given by MHA, an official said.
The central government had prohibited sale of liquor, tobacco and other non-essential items during the nationwide lockdown which was first announced on March 24 by Prime Minister Narendra Modi. At the end of 21-day lockdown from March 25-April 14, it was extended for another 19 days.
All this while, states were pushing for the opening of liquor shops as they face cash crunch due to the closure of all non-essential businesses for 40 days.
The prohibition on liquor sales resulted in states losing close to Rs 30,000 crore in tax revenues in the past month and a half.
Excise collected from the sale of liquor is a major source of income for the states that are pushing all their resources to battle novel coronavirus.
According to reports, the ban on liquor sales across the board is hitting the government to the tune of Rs 700 crore a day in terms of lost revenue.
States in 2019-20 had budgeted for Rs 1.70 lakh crore through tax on sale of liquor. Taxes from liquor sale account for 15-25% of the state's own tax revenue. Tax from liquor sale accounts for over 20% of UP, Karnataka and Uttarakhand's own tax revenue.
In states like West Bengal, Chhattisgarh, Himachal Pradesh, Punjab and Telangana, state excise accounts for 15-20% of the states' own tax revenue.
In some states like Kerala, Maharashtra and Tamil Nadu tax on liquor account for less than 10% of the state's own tax revenue. The overall proportion of taxes from liquor sale as a percentage of states' own tax revenue is in single digit primarily because some of the bigger states like Maharashtra, Tamil Nadu have lower tax collection from sale of liquor while states like Gujarat and Bihar earn no revenue as liquor is banned in these states.
Delhi -- a Union Territory with higher than national per capita income -- earns over Rs 5,000 crore from liquor sales every year. Karnataka earned Rs 21,400 crore from liquor sale in 2019.
In 2019, Rs 2.48 lakh crore revenue was collected from excise duty on alcohol across India which ranges from as low as 75% in Goa to 300% in Maharashtra.
In 2018, the revenue collected from sale of liquore was 2.17 lakh crore while it was 1.99 lakh crore in 2017, according to data provided by the International Spirits & Wine Association of India (Iswai).
Almost 70% of alcohol distribution in India happens through liquor vends or shops, while 30 per cent happens on the premise, that is, in bars, pubs, hotels, and restaurants.
At the national level, about 14.6% (16 crore) people (in the 10-75 age group) consume alcohol with Chhattisgarh, Tripura, Punjab, Arunachal Pradesh and Goa having the highest prevalence of liquor use, a government survey in February 2019 found.
Four states and one Union Territory have prohibited prodcution and sale of liquor. Mizoram, Gujarat, Bihar, Nagaland and Lakshadweep (UT) and dry states with a ban on liquor sale.
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