States governments, facing revenue crunch, heaved a sigh of relief as standalone liquor shops opened in the country. According to the Reserve Bank of India's data, state governments earned around Rs 1.75 trillion from excise duty, most of which came from liquor sales, in FY20.
It was their third-largest source of revenue after GST and sales tax or value-added tax (largely on transport fuel). Excise duty accounted for nearly 12.5 % of states' total tax revenues in the last fiscal year.
UP got over Rs 31,500 crore as excise revenue — nearly 22% of its tax revenue — in FY20. The Karnataka government earned 21% of its revenues from liquor sale. Other states with high dependence on liquor tax include Maharashtra, MP, West Bengal, and Telangana.
Kerala, where liquor usage is believed to be very high, earned only 4% of its revenues from liquor. The share in Punjab was 16.5% (Rs 6,200 crore); in Delhi, it was 14% or Rs 6,000 crore.