Lottery business run by Kerala govt posts over 21 % growth in 2017-18

The revenue from lottery sales during 2017-18, till February, was Rs 89.77 billion compared to Rs 73.95 billion in 2016-17

Kerala Lottery, the lucky-draw business run by the state government to raise fund and invest in healthcare schemes grew over 21 per cent in 2017-18, much higher compared to the previous two financial years.

The revenue from lottery sales during 2017-18, till February, was Rs 89.77 billion including Goods and Service Tax (GST) of Rs 7.45 billion compared to Rs 73.95 billion in 2016-17, according to officials. During the financial year 2015-16, the revenue was Rs 63.17 billion against Rs 54.45 billion in 2014-15.

The expenditure for the department during 2017-18, till February, was Rs 66.46 billion. However, a report by the Comptroller and Auditor General of India (CAG) in 2016 points out that while the income from lotteries is the major source of revenue under the non-tax revenue at Rs 54.45 billion in 2014-15, equally high expenditure towards payment of prize, commission and others has resulted in net yield of Rs 9.6 billion only.

The state government says that the growth during the last financial year was due to the reduction in the ticket price and changes in the prize structure.

"Owing to the changes in the prize structure and the drop in the ticket price, bringing in standardisation in prices, has increased the sales from Rs 6.84 billion in May 2017, to Rs 7.07 billion after the changes implemented in June 2017. It has grown to Rs 7.43 billion in July and the growth continued in the following months," said T M Thomas Isaac, Minister for Finance, at the State Legislative Assembly recently.

The approximate profit during 2017-18, till February, was at Rs 15.84 billion. The profit during the year 2016-17 was at Rs 16.91 billion, which was a 15.7 per cent growth compared to the profit of Rs 14.61 billion during 2015-16, according to the Kerala Lottery department officials.

The proceedings from the lottery sales are deposited in the treasury. It also sells lottery under a healthcare scheme for which the budget allocation is for Kuranya Benevolent Fund.

The state prints around 9.6 million lottery tickets every week and the increase in the number of tickets has also helped the distribution and thereby increased the revenue to the government. The state has been taking various efforts to keep the lottery firms from other states to enter the Kerala market and to curb the illegal lottery systems.

The state's budget for 2018-19 envisages that the resources for the Comprehensive Health Care Scheme of the government will be mobilised through Kerala Lottery. The State lotteries have been a significant portion of Kerala's non-tax revenue.

"Kerala has estimated to generate Rs 142.71 billion through non-tax sources in 2018-19. The estimated increase of 21.7 per cent in non-tax revenue will be driven by receipts from state lotteries. In 2018-19, state lotteries have been budgeted to contribute Rs 111.10 billion," according to a report by PRS Legislative Research on the State Budget 2018-19.

It adds that the state's revenue receipts, which is 57 per cent of the total revenue, was down by 5.7 per cent during 2017-18, at Rs 53.18 billion compared to the estimates, mainly due to the under-collection of the revenue on account of state lotteries. 

In 2017-18, Rs 91.96 billion was estimated to be received under state lotteries, which was revised to Rs 89.14 billion under the revised estimates.

The lottery industry in Kerala, controlled and operated by the state government, has seen its peak growth in 2014-15, as it was a 43.5 per cent growth from the Rs 37.93 billion sales revenue during 2013-14.

According to the previous government, the lottery business in the state has grown from Rs 5.57 billion in 2010-11 to Rs 54.45 billion during 2014-15, a tenfold increase within a span of four years after the Congress-led government took charge in 2011. The growth has provided employment to thousands of agents/sellers with income contribution to the magnitude of Rs 15.24 billion in the form of commission during 2014-15.