Cash Crunch Hits Liquor Sales in UP, Tamil Nadu
Cash Crunch Hits Liquor Sales in UP, Tamil Nadu
In Tamil Nadu, tipplers wait outside liquor shops as early as 8 am.

Lucknow/ Chennai: The cash crunch following the Union Government's move to demonetise Rs 500 and 1000 currency notes has hit liquor sales in Uttar Pradesh and Tamil Nadu.

Liquor sales have gone down drastically in Uttar Pradesh. Since demonetisation, sales have gone down by nearly 50% over the past week.

Now, experts fear that the state government might lose out as well in revenue collection and fall short of the financial year revenue target of Rs 19,250 crore.

A bureaucrat on the condition of anonymity said that they were worried as excise revenue is the third largest source of earnings for the state after stamp duty and sales tax.

A similar story was witnessed in Tamil Nadu. Here, the government led by Chief Minister J Jayalalithaa was elected for a second term on the promise of prohibition.

Jayalalithaa ordered shutting of 500 Tamil Nadu State Marketing Corporation (TASMAC) shops when she was sworn in as the Chief Minister in May 2016. She also ordered the reduction of liquor shops. But for the first few months, the sales were not affected.

What the government could not do, demonetisation did. One of the employees working in a TASMAC shop in north Chennai said, "Sales have dropped over the last 6 days. We usually get Rs. 1.6 lakhs per day. But after Modi's move, we are able to get over 1.2 to 1.3 lakhs only. There is a 15-20% dip in sales.”

"We stopped accepting Rs 500 and 1000 ever since the announcement was made. Tipplers either come with the old notes or the new 2000 notes. We don’t have enough denominations of Rs 100. Some of the tipplers wait to get back the change or leave without buying. This could continue for at least another 10 days till enough denominations of 100s are circulated in the bank branches,” he added.

In Tamil Nadu, tipplers wait outside liquor shops as early as 8 am. A man in Tiruvannamalai district duped a TASMAC outlet by giving a fake 2000 note and got away.

In Uttar Pradesh, Lucknow alone accounts for 1.5 lakh bottles of liquor every day. Consumption and sales across other big towns of the state follow this trajectory. But with demonetisation of Rs 500 and 1000 currency notes, people are queuing up at banks for money and liquor is no longer the priority.

Kanhaiya Lal Maurya, Lucknow Liquor Traders Association President, said that the situation was really bad for the business.

"Purchasing liquor is no longer a priority for people. Sales have gone down by 50%. Only those shops which have E-payment facility are doing business, not even 2 percent of total shops," he said.

"We want that government should consider about allowing old Rs 500 and 1000 old notes to be used at liquor shops," he added. His association is thinking of approaching the RBI with this demand.

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