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TN keeps poll promise, 500 state-run liquor stores to shut shop

Out of the 500 liquor outlets, 58 are in Chennai and its suburbs. Now some experts say this closure will see the state's exchequer losing as much as Rs 7 crore per day -- that's 10 percent of its total daily revenues of Rs 70 crore. But the government is not buying that math.

June 21, 2016 / 10:12 PM IST

Tamil Nadu Chief Minister Jayalalithaa has kept her poll promise and rolled out the first phase of prohibition in the state. This saw the closure of 500 state-run liquor outlets across the state. CNBC-TV18 reports that though this could hurt the state's alcohol revenues, which stood at over Rs 26,000 crores in FY15, the state government is not worried.

Out of the 500 liquor outlets, 58 are in Chennai and its suburbs. Now some experts say this closure will see the state's exchequer losing as much as Rs 7 crore per day -- that's 10 percent of its total daily revenues of Rs 70 crore. But the government is not buying that math.

"That seems to be an over-estimation in my honest view. I would imagine the loss will be closer to around 8 percent, proportionate to the drop in volume," says AIADMK Spokesperson K Pandiarajan.

Clearly, the state's assessment is that this year alone, alcohol consumption across the state will drop 7-8 percent. But selecting the shops to be closed in phase one has not been an ad-hoc process.

Stores which have recorded the maximum number of complaints from residents, are situated on national highways or are near places of worship have been the first to get the axe.

The government has also finalised a re-deployment plan for the 4,200 TASMAC staff in these shops. They will now be given supervisory and sales positions in liquor stores that cross revenues of Rs 1 lakh per day. Most of these transfers, the government says, will be within the home districts of these staffers.

Also, to make up for revenue losses, the government will look at increasing non-tax revenues. Some of these measures include a new granite policy in the upcoming state budget and policies to monopolise the sales and distribution of beach sand.

"From a level of 4 percent, which is what the DMK government left behind of our total revenue only 4 percent is non-tax revenue," says K Pandiarajan, adding, "We are already at 6.5 percent. Over the last five years, this has increased. I see a good chance of this going up to 8 percent of our total revenue."

The fact still remains that many state-run liquor shops like these are still open for business, which pretty much sums up why Tamil Nadu's revenue from liquor sales is not expected to take much of a beating. What's more? The state's prohibition policy does not extend to private hospitality establishment like hotels and clubs. So, tipplers in Chennai, not all hope is lost.

first published: Jun 21, 2016 10:12 pm

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