Cash tap off, liquor flow slows

New Delhi: Demonetisation of Rs 500 and Rs 1,000 currency notes has made the Delhi excise department edgy as liquor vends from different parts of the city are reporting about 40% dip in sales.
The Delhi government, which has not witnessed any notable increase in excise duty collections this year compared to the same period in last year, was banking on the festival and wedding season to ramp up the revenues.However, the cash crunch has come come as a big setback for the excise department and the exact impact will be known in a week or so.
Around Rs 2,500 crore has been collected as excise duty so far and the annual target is around Rs 4,800 crore. Sources said it was not easy to meet the target given that there was almost a seven-month delay in notifying the state excise policy—the notification was supposed to come out on April 1. If the duty regime remains unchanged and better monitoring to plug the leaks and robust season sales are the only measures available for the excise department to boost its revenue. Now, the latest currency crisis is likely to put a dampener on the government’s plans.
Vikas Arora, who runs a liquor shop in south Delhi, told TOI, “There has been a sharp decline in customers visiting my shop ever since the Rs 500 and Rs 1,000 notes have been demonetised. Even those who are coming get caught in the problem of change. With the new Rs 2,000 notes, the problem will grow manifold.”
He claims most customers give cash and there are just 25% of buyers who use credit cards. The problem is said to be worse in west and east Delhi where almost everyone uses cash to by liquor.
A major liquor dealer having outlets across the city said that the average daily earning had come down from Rs 5 lakh to Rs 1 lakh in the past few days. “People don’t have cash to pay and this is impacting our sales. Also, this has severely affected the business in this wedding season,” he said.
Data available with the Delhi government shows that there are 704 restaurants with bar licences besides 399 shops in malls with liquor licences. The number of government-run vends stands at 350.