Kerala deluge: State bets on liquor sales during Onam, may rake in extra Rs 230 crore


The floods in Kerala have left the economy in tatters, wiping out gains from three important sectors: plantation, tourism and Onam trade. To partly compensate for the loss from these sectors, Kerala government is betting on its ever-reliable source of income from liquor business.

The government has hiked excise duty on liquor by 0.5% to 3.5% for 100 days with an eye on Onam sales and expects this to bring in an extra Rs 230 crore. Revenue from liquor has been growing in the last few years and contributed more than Rs 11,000 crore to the state’s kitty last year. The total loss to the agriculture sector is yet to be fully assessed but is expected to be not less than Rs 1,000 crore.

Of this, the plantation sector alone will account for about Rs 700 crore as per initial estimates by planters. The rest will be from damage to paddy fields, particularly in Alappuzha and Palakkad districts, and vegetable and banana cultivated for Onam that falls at the end of this week. Floods and rains have compounded the misery of the plantation sector of the state already battling high production cost and low productivity. The value of production from the sector is estimated to be around Rs 10,000 crore.

“About 60-65% of the rubber and 50% of tea plantations have been destroyed in the state. The cardamom sector is facing total ruin. Pepper and coffee have been affected by fungal diseases,” said Thomas Jacob, chairman of Association of Planters of Kerala. With the tag of God’s Own Country, tourism has been a top revenue earner for the state after the services sector clocking over Rs 33,000 crore last year. The sector has seen 11-13% growth in the last couple of years.

But the high hopes of tour operators and hotel industry have been dashed first by Nipah virus scare two months ago and now by the deluge. “We were optimistic about the better growth this year as the government had brought in new liquor policy,” said Abraham George, chairman of Intersight Tours and Travels. The closure of bars other than in five-star hotels by the previous government had hit tourism in the state. But the change in the police since has helped in the opening of most of those.

“But as most of the tourist spots like Munnar, Thekkady, Kuttanad, Kumarakom, and Wayanad have been hit by rains and floods, the tourist inflow has stopped. We are facing a lot of cancellations for September,” George said. The rains have delayed or stopped the blossoming of Neelakurinji flower in Munnar, earlier expected to happen from the middle of August. The flower that blooms once in 12 years was expected to attract travelers in hordes. George expects the calamity to have an impact on the tourism season that begins in October.


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