> Assam is set to lose Rs 400 crores in the 21-day lockdown in excise revenues
> Government to decide if wine stores can be opened as in Punjab and Kerala
> Excise VAT likely to increase to recover losses post lockdown
With fresh Coronavirus cases on the rise in India, the nation has started witnessing the effects made towards containing the spread of the virus - a complete halt to economic activity. The 21-day lockdown announced by the Prime Minister, Narendra Modi is to combat the dreaded virus Covid-19. But the impact is showing in loss of crores of rupees.
The business class, middle class, daily wage earning class, state/union governments and all are expected to suffer huge losses. But how will the government recover these losses?
Assam excise, fisheries and forest minister Parimal Suklabaidya, talking to G Plus said, “In 21 days the excise department will lose around Rs 300 crores as excise revenue and also the forest and fisheries department will incur huge losses.”
Amid the Coronavirus scare, several states and union territories across the country have imposed a strict curfew on people's movement in a bid to stop the spread of the virus.
Shops, except for those selling essential items, have been closed. However, according to media report, liquor shops in Kerala and Punjab continue to operate in spite of the lockdown.
On similar lines, the excise minister of Assam was asked if he has such plan, and the excise minister said, “We will certainly lose huge revenue but we do not want to encourage liquor sale.” But the minister expressed that because of the lockdown there are reports coming in that the sale of illicit liquor which is illegally made is gradually increasing. He said, “Within a day or two we will decide if we should open the wine stores.”
A senior official in the excise department said that including VAT and other taxes the state will lose around Rs 400 crores as excise revenue in 21 days.
The excise department in any state is one of the highest revenue generating departments.
In 21 days Guwahati will lose Rs 21 crores as excise revenue.
Union Finance Minister Nirmala Sitharaman described Modi’s Tuesday evening announcement of the national three-week lockdown as an unforeseen natural disaster that her ministry quickly stepped up to address. “We’ve immediately responded within 36 hours of the lockdown,” Sitharaman said, at a press briefing to announce a financial package of welfare services.
80 crore people, or 800 million, will get 5 kgs of wheat or rice and 1 kg of pulses for the next three months, for free, over and above the 5 kgs of wheat or rice that they already do. This can be collected in two instalments.
The government will cover the entire Provident Fund contribution, including that of workers and employers, for certain categories for the next three months.
Healthcare workers will be given Rs 50 lakh medical insurance. Similarly, the union finance minister announced many such packages as a relief to the citizens of the country. Even the state governments across India announced some or other relief.
But all these reliefs will add up to the burden of the government. Though there are Prime Minister’s Relief Fund and Chief Minister’s Relief Fund to deal with situations, during the lockdown period, even the government will lose huge amount of revenues.
To recover such losses, a city based chartered accountant Manoj Nahata opined that the government is likely to announce some economic stimulation measures soon. Nahata said, “The government, after the lockdown period is over, might increase cess or tax by a little amount so that general people are not affected and the government also recovers the losses.”
The business class will be mostly affected as they have to pay fixed investments like rents, salaries, tax and many other such things. Therefore, the government should provide some subsidy to the small and medium business sectors so that no one suffers.
State excise minister Parimal Suklabaidya said that VAT on liquor might be increased after lockdown to recover the revenue loss.
Executive member of the state Bharatiya Janata Party (BJP), Rajkumar Tewari, said no one knows the lockdown is for 21 days or if it will be further extended, but everyone will suffer. “It will be difficult for the government to recover the losses.”
