Why liquor sale is important for these Southern Indian states

More than 10% of the revenues of five southern states, Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Kerala, come from that single source.

Tamil Nadu and Kerala top the list in revenue percentage terms at 15 per cent each. For Kerala, the tax on liquor is its single largest revenue source.

Kerala, despite being home to only 3.3 crore people, draws the highest revenue from liquor among states, because among the five states it charges the highest tax rate on liquor.

Andhra Pradesh's revenue share from liquor is 11 per cent. The state's share in India's alcohol consumption is 7 per cent whereas 3.5 per cent is the share of this state in COVID-19 cases in India.

Karnataka recently raised taxes on liquor by a sharp 11 per cent to shore up revenues. Karnataka has followed Delhi which imposed a whopping 70 per cent 'special corona fee' to help garner much needed revenues amid the disruption caused by the pandemic and the lockdown.

These five states viz Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Kerala source 10-15 per cent of their total revenue from excise duty on liquor sales and collectively account for 45 per cent of the total alcohol consumption. 10 per cent of the states' revenue comes from alcohol taxes.

Delhi is at number three when it comes to liquor revenue share with 12 per cent of tax revenue, but its citizens enjoy only 4 per cent of the national intake.