Liquor revenue: Short-term gain, long-term drain (IANS Analysis)

Chennai, July 31 Freebies and welfare schemes of state governments funded mainly from liquor tax revenues are like robbing the family head and giving it to his family members, say experts.

However, they also agree that tax revenue from liquor is a major source of revenue for many states in the country like Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh and others and it is not easy to cultivate alternate revenue sources.

"Over Rs 2.70 lakh crore is earned by the Indian states from liquor sales. It is a major source and a quick alternative source cannot be found," Dr. K.R. Shanmugam, Director, Madras School of Economics told .

According to him, states charge excise, VAT and other taxes on liquor.

Tamil Nadu is known for freebies and the government also retails liquor.

The state has recently revised upwards the liquor prices. It earns about Rs 37,000 crore as revenue which is about 21 per cent of its total revenue, said Shanmugam.

Further the state's debt: state gross domestic product

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