India: Alcohol Harms Economy, Fuels COVID-19

India started to relax COVID-19 restrictions as they entered what is called the third phase of the lockdown from May 4, 2020. One of the first steps seen with lockdown relaxation was lifting of the alcohol sales ban in states. This has already led to negative consequences and is predicted to lead to even more grave repercussions in the coming months and years.

Movendi International previously reported on some of the issues of lifting the ban on alcohol sales during the public health crisis that is the novel coronavirus. This includes reported increases in violence and domestic violence, breaking of physical distancing measures and physical and mental health harms caused by alcohol which aggravates the burden on Indian healthcare, emergency services and resources.

India: Fallout From Alcohol Sales Re-Opening

One of the major reasons given by Indian States to justify lifting the alcohol sales ban is obtaining revenue. While alcohol taxes may appear to be a significant source of revenue for the states, when the cost of alcohol harm is taken into account losses become far greater than the revenue incurred from alcohol.

Alcohol’s death toll in India before COVID-19 was high to begin with.  In 2017, alcohol was responsible for more than 580,000 deaths in India, according to the Global Burden of Disease Study. The three leading causes of alcohol attributable deaths in India are tuberculosis, road injuries, and self-harm. All of these conditions have an existing large burden in India and increase risk of COVID-19 infection.

Alcohol use is known to weaken the immune system. Alcohol also causes many non-communicable diseases (NCDs), such as cancer, cardiovascular disease, mental ill-health or diabetes. Both these factors increase risk of infection, complications and death from COVID-19.

India has a large burden from alcohol use disorder. According to a report by the Ministry of Social Justice and Empowerment (MoSJE) of India, every third alcohol user in India needs help for alcohol use problems and only about 1 in 38 people with alcohol dependence, report getting any treatment or help.

In the long run alcohol has proven to be detrimental to the Indian economy. A recent modelling study found that economically India loses 1.45% of its GDP due to alcohol. This is more than the country’s entire health spending which is 1.28% of its GDP. In numbers, between 2011–2050 India stands to lose US$2.2 trillion – accounting for tax revenues – due to alcohol costs.

Essentially, Indian states are trying to earn revenue from the alcohol problems in the country. There is an apparent incoherence in policy goals and objectives. State governments are trying to use revenue from alcohol – a product which is proven to be harmful to both the health and economy of India – to try to save lives and the economy from the pandemic.

The central government is also responsible for states lifting the alcohol ban citing short-term revenues. With the introduction of the goods and services act (GST) states lost the ability to decide taxes on goods and services within their state, instead states are dependent on the central government to collect these taxes and then pay a share to the states. During the COVID-19 period the Centre had not paid the states their due tax money, defaulting on its obligation. This resulted in a lack of funds to manage the pandemic and its costs within state governments.

A priority in the Indian exit strategy from COVID-19 lockdown should be to maintain restricted availability of alcohol as recommended by the World Health Organization (WHO). Taking short sighted decisions – such as to obtain revenues from alcohol – during a pandemic can cost lives of many Indians in the months to come.


Global Health Now: “Alcohol: Bad for Indian Outbreak, Worse for Indian Economy

The Quint: “Why States Are Relying on People’s Alcohol Addiction to Save Lives