Bengal: Desperation for revenue prompts state govt to reopen bars
West Bengal government's decision to permit reopening of singing bars in the state might have drawn criticisms from different quarters, However, the real reason behind reopening of singing bars is the desperation to jack up the excise revenue in the state. Singing bars remains one of the principal sources of fuel for the cash- strapped state exchequer.
A prior decision of the state government to impose a 30% additional excise on liquor had already hit the liquor sales and state excise collection badly.However, according to state excise department sources, as days passed on the additional excise hit liquor revenue collection badly as people started shifting to either cheaper liquor or illegal hooch.
Recently, the Confederation of Indian Alcoholic Beverages Company (CIABC) wrote to the state government and pointed out how the high additional excise resulted in a hit on liquor sales in the state. In that letter, the confederation's secretary B Giri said that after the reopening of the liquor shops during the lockdown period, the beer sales in the state declined by 40%.He referred to Delhi's example on this count and said that at a time the Delhi Government imposed an excise rate as high as 70% on liquor. But that resulted in a disaster for the state exchequer and the liquor sales. After that the Delhi government brought down the excise rate to just five per cent, that again encouraged increased liquor sales and increased excise collection.
The West Bengal government allowed the bars to reopen from September 1 but with a lot of restrictions. Only bars that were outside the containment zones were allowed to open. The bars outside the containment zone were allowed to operate only with 50 per cent customer strength in order to ensure that the social distancing norms are maintained.At the same time, the state government clearly said that the singing bars will not be allowed to reopen and no live performance would be allowed in the bars. The state government also did not permit reopening of on-shops. Following such restrictions, the bars witnessed a sharp decline in the number of customers.
According to state finance department statistics during the ongoing financial year of 2020-21, the state government has set a target to garner excise revenue to the tune of Rs 12,731 crore, which is much higher than the previous fiscal's figure of Rs 11,626 crore.However, as the pandemic and lockdown started, there was a major impact on liquor sales and revenue collection. State excise department sources said that if this situation continues then it will be impossible to achieve the excise collection target for the current fiscal. It is also doubtful when the collection target for the last financial year will be met, a state excise department official said.
During the period of July-August-September 2020, the business has been almost 60% down during the corresponding period during the previous fiscal. We are running with lesser staff. However, the business is suffering," he said.
The bar owners in Kolkata have welcomed the decision of reopening the singing bars since the bar owners feel that without live performance it is impossible to improve the quantum of sales. In such a situation the state government's fresh notification allowing re-opening of singing bars have brought relief for the bar owner.The festive season is approaching. We are expecting an improvement in sales during those days. Deep pocket customers generally come to bars where there are arrangements for live performance. They want some relaxation at the end of the day. So the re-opening of the singing bars will surely help in improving sales. There is no harm in resuming live performances in bars after maintaining health protocols," said Kalyan Bandopadhyay.Senior office-bearer of the state's liquor merchants' association, Subrata De said that corona and lockdown have virtually ruined the liquor trade. "The reopening of singing bars and live performance is expected to improve the business substantially. However, the local administration is responsible for the implementation of the state government notification and the police permission is also required. We are expecting to get that permission as early as possible," De said