Long lines for liquor have been a constant fixture in states where stores have opened, with people waiting in line for many hours to stock up. Serpentine queues were seen in various parts of the country including Karnataka, Telangana and Andhra Pradesh, with social distancing norms out the window in some places.
Amidst these scenes, one solution had been proposed: That it’s time for alcohol to open up.This isn’t a novel idea, and has even been done before. For example, in Bengaluru, apps Dunzo and HipBar both previously delivered alcohol. While it was only a portion of Dunzo’s business (as a task running app where it was delivered from government-licensed vendors), it was the mainstay of HipBar. But the state’s online delivery of alcohol was shut down in September 2018 by the Karnataka High Court, after the excise department stated that there was no licence for the online delivery of liquor.
While different players have tried without much success for the home delivery of alcohol, Zomato is now pushing to deliver alcohol, reported Reuters.
Prasanna Natarajan, the co-founder and CEO of HipBar, says that the policy needs a relook.
“We have been in discussions with many state governments to encourage them to take up the channel through which customers can buy alcohol. The industry has come to a realisation that such a big industry generating so much revenue does not have an online presence. I think state governments are warming up to it,” he says.
Nitin Pai, the director of the Takshashila Institution, says that these long queues are partly a result of six weeks of lockdown, and partly out of the anxiety that there might be future lockdowns. “The queues should ease off in a few days,” he says.
“Yes, home delivery of liquor should be permitted, with adequate safeguards,” he adds.
Nitin says that for home delivery of liquor, there should be mandatory ID checks to ensure that it is being delivered to adults, there are limits on sale per customer; along with contactless delivery, where the delivery executive has masks and gloves.
“In fact, we might find it easier to enforce safeguards on home delivery than at shops,” he says.
This, Prasanna believes, is something that an online service can provide.
“Going digital is not going to make a new category of drinkers. Digital is going to help regulate and moderate because you cannot stop someone from physically going and buying booze but digitally, you can intervene and set quotas. It’s not unabated. We’re putting in a system where every kind of reasonable restriction can be intertwined using technology,” he says.
Why home delivery may be necessary
In September 2019, Justice S Sujatha of the Karnataka High Court while ruling that alcohol cannot be delivered, had said that “liquor is deleterious to the health of mankind”, and stated that for children below permissible age “succumbing to this temptation of liquor consumption”, it may not be strictly regulated through online orders.
While this is largely the view taken towards alcohol consumption, demand for the product generally remains the same no matter how much states increase the price by levying cesses. In the last three days, Karnataka has purchased Rs 231.6 crore worth of alcohol.
Despite the stigma surrounding it and some experts saying it is not the time to focus on the delivery of alcohol, states have been forced into a corner.
The sale of liquor is crucial to states (except those with prohibition) because large revenues go to the Centre under GST — excluding levies on petroleum, real estate and especially, alcohol.
On average, nearly 70% of a state’s revenue comes from taxes, which has taken a huge hit during the pandemic. For example, a report by PRS Legislative Research stated that for the time alcohol sales were stopped completely, Karnataka was likely to lose Rs 1,892 crore (1.05% of its revenue) each month during the lockdown.
The manufacture and sale of alcohol are currently crucial for states looking to refill their coffers as they wait for GST compensation and disruptions to the budgets due to the lockdown.
“The state also has constraints in revenue because the centre is not giving an inch. States in India are desperate for revenue and the government of India is not practicing cooperative federalism. I can understand why states are doing this but you can see the consequences,” says economist Venkatesh Athreya.
State governments are warming up to the idea of home delivery of liquor, with Punjab and West Bengal putting it into motion. How this plays out in the current scenario remains to be seen.