Analyzing the Changes in Sales and Consumption of Alcohol upon the Imposition of Taxes in Gurugram

Tax imposition is a government policy measure to generate revenue. However, it is also often used to control the demand and supply of demerit goods. Demerit goods are products whose consumption is harmful to individuals. The Haryana government amended its alcohol licensing policy on 24th April 2021, raising the excise duty on Indian Manufactured foreign liquor from 20 to 25 percent. This research paper aims to analyze the consequences of these amendments to existing policy measures to control the demand and supply of demerit goods (alcohol). Simultaneously, identifying correlations, if any. Correlations will get identified and analyzed, followed by an evaluation of their effect on tax imposition. The consumers of alcohol will get segregated on various demographic factors such as age group and income bracket to analyze the changes in purchasing patterns due to the tax hike. Through a thorough interview with various alcohol vendors located within five-kilometer proximity of Sector 56, this research will deduce whether the demand for alcohol price elastic or not.