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POLICY REPORT ON LEGALISATION OF ONLINE DELIVERY OF ALCOHOLIC BEVERAGES

We prepared a policy report drafted by Mr. Bhrigu A. Pamidighantam and Mr. Arindam Bharadwaj for the online home delivery of Alcohol in the state of Uttar Pradesh using a mobile app and proposed certain amendments based on our “3 Economic Model” in the existing U.P. Excise Act. Since the State Government was facing an acute shortage of funds due to the cessation of major economic activities during the COVID-19 Lockdown period, the Ministry of Home Affairs issued guidelines allowing the state governments to sell liquor within their territories through standalone liquor shops across the red, orange and green zones except for containment zones. This measure proved to be successful and witnessed a mammoth sale of liquor in Uttar Pradesh worth crores of rupees but it came at the cost of spreading Corona Virus at a sharp rate. Hence states like Maharashtra, NCT Delhi, Punjab, Jharkhand etc., adopted this online sale policy of alcoholic beverages. Therefore this report focusses on the necessity for the same in U.P with improved guidelines and rules on the basis of lessons learned from other states.

The report also highlights the three-fold benefits along with increased revenue for the state. First, it ensures that state governments have enough funds for their day to day operations. Second, it reduces the burden on the state machinery and ensures that state resources and manpower are utilised for other essential operations, thus implementing social distancing norms, preventing drunk violence along with nuisance and harassment of women consumers at these shops. Third, through online delivery, governments can perform mandatory age checks at the point of delivery and maintain other necessary safeguards regarding quantity and Aadhar card or other government identity verification, thus preventing illegitimate consumption of alcohol and drunk driving cases.

Also since During the Financial Year 2018-19, Uttar Pradesh was one of the top five states with the highest revenue from excise duty on liquor, amounting to Rs. 25100 Crores and with a monthly average amount of Rs. 2,500 Crores in 2019-20. But due to the lockdown, this figure was severely affected as the sale of alcohol for almost three months went down to zero. As per our projection, if all the customers in the State of Uttar Pradesh use the mobile application and the home delivery system to buy alcohol for a month, the State Excise department is expected to gain around Rs. 1748.921 Crores in revenue, covering 95.4% of the total losses that were incurred due to the lockdown.

In light of these facts, and after a careful examination of the modus operandi of the liquor home delivery system we also present our proposed rates, delivery guidelines, licensing norms, payment distribution, delivery days and time along with the mobile application, liabilities, age guidelines, insurance and consumption limits, we argue a strong case in favour of online liquor distribution for the State of Uttar Pradesh.

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