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India's weak state finances getting weaker with the alcohol ban
April 24, 2017
- India’s increasing alcohol prohibition is threatening to scoop a hole in the already inflated state finances.
- At least four states have announced plans to bar liquor sales, adding to five that are already dry and a supreme court ruling that banned drink sales near highways from April 1.
- The prohibition is set to cut a revenue stream that contributes at least 25 percent to state coffers and complicate a federal government push for fiscal discipline as it seeks to lure foreign investment to Asia’s third-largest economy.
- “The ban on liquor comes at a bad time for states which are grappling with falling revenues and rising spending,” said Indranil Pan, Chief Economist at Mumbai-based IDFC Bank.
