The Hindu Business Line : States to earn Rs 40,000 cr from liquor, lotteries

Call it promotion of vice or otherwise. Either way, liquor and lotteries are habits that not only less-resolute mortals, but even cash-strapped State Governments would find difficult to kick or live without.

During the current fiscal, liquor and lotteries are together expected to generate Rs 40,274.13 crore in revenue for States - that is almost 13 per cent of the total amount (Rs 3,10,266.21 crore) they would earn from their own tax and non-tax revenue sources.

According to the Reserve Bank of India's latest report on `State finances: A study of budgets of 2006-07,' liquor (excise) alone is slated to yield Rs 29,533.48 crore, making it the largest revenue source for States after sales tax (Rs 1,20,709.15 crore).

States would be garnering more from excise than what they have budgeted on account of stamp duty and registration fees (Rs 28,196.32 crore), Central sales tax (Rs 19,345.88 crore), tax on motor spirit and lubricants (Rs 14,376.65 crore) and motor vehicles (Rs 13,556.59 crore).

Lotteries come next, at Rs 10,741.25 crore, ahead of heads such as taxes and duties on electricity (Rs 8,227.55 crore), goods and passengers (Rs 7,464.84 crore) and land revenue (Rs 3,332.44 crore).

Punjab, Karnataka

To get a better perspective, one needs to consider individual States, particularly Punjab and Karnataka.

In 2006-07, Punjab has targeted excise collections of Rs 1,628.44 crore. But over and above this, Chief Minister Mr Amrinder Singh's administration is also looking to realise Rs 4,073.55 crore from lotteries. Together, liquor and lotteries would contribute Rs 5,701.99 crore or 37 per cent of the State's total own tax and non-tax revenues.

Karnataka, on its part, would be the leading excise revenue earning State this fiscal, at Rs 4,060.34 crore. It is also tipped to occupy the No. 2 slot vis-à-vis lotteries, at Rs 2,454.20 crore. These two combined will contribute nearly a quarter of its overall own tax and non-tax revenue collections.

At the other extreme of this `vice dependence' chart is Gujarat, which, by virtue of its prohibition policy, is scheduled to gross a paltry Rs 58.52 crore from excise. The land of the Mahatma would also not be relying a bit on making money from lotteries.

In between the two extremes is Maharashtra, which has budgeted Rs 3,100 crore from excise and Rs 2,262.80 crore from lotteries. However, given its diversified tax base and being home to the country's financial capital, the share of liquor and lotteries in the State's own tax and non-tax revenue collections is only slightly more than 11 per cent.

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