Spirit remains high as note ban has little effect on liquor industry

High-spirited tipplers in Karnataka have defied the cash crunch and are all set to make the state Excise department cross the target as they did in the past.

While businesses have suffered due to demonetisation, the liquor industry is showing no signs of a slump. There indeed was a decline in Excise revenue on November 9, two days after the demonetisation, but business bounced back in a big way, making up for the losses incurred the previous day.

Additional Commissioner of State Excise (IMFL) Vishwaroop A S confirmed that there was no effect of the currency ban on liquor sales. He, however, conceded that there was a decline of about 60% in the sale of India Made Foreign Liquor (IMFL) on November 9, but the very next day, business rebounded.

“It seems the bars and liquor shops continue to accept the discarded currencies to overcome the losses,” said Vishwaroop.

Daily, 1.6 lakh crates of liquor worth Rs 51 crore are sold in Karnataka and there had been no downward movement in the numbers, he said.

The Karnataka government has set a target of Rs 16,200 crore as Excise revenue this year, whereas the sale of liquor is around Rs 51 crore to Rs 52 crore daily. The expected revenue from liquor this year is more than Rs 18,000 crore, which exceeds the target.

“On the day the notes were demonetised, followed by slump in revenue the next day, we thought this year we will not be able to achieve the target for the first time in the history of Karnataka. But, the way business rebounded made us feel that the Excise revenue will not decline. Yet, we are closely monitoring the situation,” said the officer.

Despite its concern about the business, the Excise department has asked liquor shop and bar owners not to entertain the scrapped notes anymore.

On a high

Average sale daily: 1.6 lakh crates 
Average daily revenue: Rs 51 crore
Slump of 60% on November 9 after demonetisation
Sale rebounded immediately, making up for loss  
No dip in liquor business in state, says Excise department  
Department feels liquor shops accepting scrapped notes
Will achieve the target, department believes