Telangana Tops Nation in Liquor Spending: Each Resident Spends Rs 1,623 Annually

Telangana has taken the lead in India for the highest per capita annual expenditure on alcoholic beverages, with each resident spending an average of Rs 1,623 on liquor every year. This figure surpasses all other states in the country, with Andhra Pradesh following closely behind at Rs 1,306 per person. These insights are drawn from a working paper titled “Revenue Mobilisation from Taxes on Alcoholic Beverages,” published by the National Institute of Public Finance and Policy (NIPFP), New Delhi.

Rising Trends in Alcohol Consumption

The report sheds light on significant regional variations in alcohol consumption habits across India. In Telangana, the average expenditure on alcoholic beverages has dramatically increased from Rs 745 in the 2014-15 fiscal year to Rs 1,623 in 2022-23. Andhra Pradesh has also seen a sharp rise in spending during the same period, with the average expenditure growing from Rs 365 to Rs 1,306.

This steep rise in alcohol spending highlights the growing demand for alcoholic beverages in these states, which could be influenced by a variety of factors including economic growth, changing social norms, and state policies that might encourage or at least accommodate higher consumption levels.

Contrasting Trends in Other States

While Telangana and Andhra Pradesh have witnessed significant increases, other states such as Goa and Kerala have shown a decline in alcohol expenditure. This contrast underscores the diverse drinking habits across different regions of India, which may be shaped by cultural, economic, and regulatory factors.

Impact of COVID-19 on Alcohol Consumption

Interestingly, the report notes that Telangana was the only state where the average per capita annual expenditure on alcohol did not fall during the COVID-19 pandemic. In 2020-21, when economic restrictions were in place and the availability of alcohol was limited, most states saw a decrease in spending on alcoholic beverages. Telangana’s exception to this trend suggests that local factors may have sustained or even increased alcohol consumption during the pandemic.

Economic Implications

The data emphasizes the critical role of alcohol taxation in state revenues, particularly in high-consumption states like Telangana and Andhra Pradesh. The substantial revenue generated from alcohol taxes in these states reflects the importance of understanding and managing alcohol consumption patterns, both for economic reasons and public health considerations.

As these trends continue to evolve, the findings from this study may prompt further analysis of the underlying causes and potential policy responses to address the implications for state revenue and public well-being.