Alcohol Ban Another Drain on India's Weak State Finances
- Tax on liquor sales make up at least a quarter of total income
- Big fiscal gaps could see states borrowing more from market
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India’s widening alcohol prohibition is threatening to gouge a hole in already stretched 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.