Why States Are Relying on People’s Alcohol Addiction to Save Lives

Praveen Chakravarty says that states relying on alcohol to raise funds is a direct result of GST implementation. 

Published20 May 2020, 06:14 AM IST
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1 min read

Video Editor: Vivek Gupta

Why did almost all the state governments re-open liquor stores amid the coronavirus lockdown? This led to long queues of people outside liquor stores, flouting social distancing norms. States suggested that they did so to raise funds to fight the coronavirus outbreak.

Did they have no other choice but to rely on people’s alcohol addiction to save lives?

Congress’ Data Analytics Chairperson Praveen Chakravarty says no. He says that the reason behind this is the introduction of the goods and services tax (GST) by the Narendra Modi government in 2017.

How did GST force states to rely on alcohol to raise funds?

State governments get funds from three main sources, namely – tax revenues collected by states, a share of tax revenues collected by the Centre and grants from the Centre. Before GST, states had the liberty to decide their own tax rates on goods and services and collect the funds directly.

But after the introduction of GST, the states lost that power and couldn’t collect their own taxes.

States were now dependent entirely on the Centre.

During the coronavirus pandemic, the Centre has not paid the states their due tax money, defaulting on its obligation. State government’s don’t have any power to raise funds from goods and services sold in their states. The only other way that states could collect taxes were from fuel, alcohol, land, and electricity. But because of the lockdown, most of those options are not viable and alcohol is the only option left.

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