BLOGS

Kerala has made a progressive strides towards preventing the manufacture and trade of uncontrolled illicit liquor by bringing in the entire foreign liquor trade in the State under the Beverages Corporation. The taxation system prevalent in the State is that the liquor on the basis of its alcoholic content are taxed very heavily. On a comparison with other States, it can be found that the tax rates are so high in the state that most of the smugglers use, Mahe, (a part of Pondicherry State, where taxes are lowest)  and also use border check-posts  as conduits for smuggling of illegal liquor in to this State. This should have been at par with the tax rates of other states and it is unlikely that we can lower the tax rates at this stage, due to the huge loss in revenue anticipated. But it may be noted that the after the banning, the clear arrack is coming in a coloured form in the guise of foreign liquor.   The high tax regime has raised concerns in food safety of almost all sections of the male population of the State. Let me share some thoughts on this issue. (In the Gods own land of controversies, please understand that the views  expressed here are purely professional from the food safety point of view, and all the Governments, for the last few decades are following the same policy, more or less in the same lines, thinking that  High tax regime and holiday on the first day of a month will reduce consumption of liquor(sic))

1.     Preventing working class from consuming hard liquor: Though cheap liquor is purchased by the Beverage Corporation, a high tax regime prohibits the common man/working class to consume the foreign liquor sold by govt run outlets.  The result is that, he has to depend on illicit liquor, brewed with prohibited materials and in unhygienic condition,  and this often leads the government to embarrassing situations in the form of hooch tragedies. And governments, in the past, announced Rs.5 lakh per victim to tide over public anger. It may be kindly understood that even in gulf countries, where punishments like beheading or flogging in public has failed to prevent the manufacture and trade of illegal liquor. Any wise government will have to acknowledge that the consumption of liquor cannot be prevented by just raising the taxes and making the commodity prohibitively costly. That will help only illegal market to grow. It is necessary in the interest of the working class that the govt should provide them with an opportunity to take good quality liquor at a lesser cost, but with government’s control need to be there on the alcohol content and without the private manufacturers taking benefit undue advantage. The solution proposed is to manufacture good quality cheap liquor, with low alcohol percentage, at the government run Chittor sugars or Pandalam sugars and make them available through the beverages corporation/consumerfed outlets. Unless this is done, we are encouraging the mixing on illegal spirit in toddy and the health of our working class is being affected badly. In the olden days, the working class preferred country toddy, after a day’s hard labour, but the available material also has become an unsafe commodity. (see point 5 below). This high alcohol content liquor is UNSAFE, as it is spoiling the health of the our working class.

2.     Preventing younger generation from consuming hard liquor: The second class of citizens whose health is adversely affected because of the inadvertent promotion of hard liquor by the government is the youth of the State. We cannot prevent the youth from the consumption of alcohol especially when they are in parties/get-together, which are part of the vibrancy of their age.  In every such get-together, the youth generation is forced to consume the hard liquor because the cost of low alcohol beverages like beer and wine are prohibitively high in the State. So it is natural for anyone to buy and consume a half-a-pint of hard liquor rather than going for a bottle of wine or few bottles of beer. In several western countries, beer is considered in equivalent to any other beverages like Coke and Pepsi. In a recent article in the ‘Times of India’ exploring on why the consumption of alcohol is not affecting the health of Europeans, even they consume on a daily basis, the main reason is stated therein to be the consumption of beverages with low alcohol percentage, where Indians consume more hard liquor in short span of time.  In almost all the metros in India, ‘Beer pubs’ are common. It may also be acknowledged that the high cost of beer and wine has led to the failure of KTDC’s Beer/Wine Parlours.  It may be also be noted that even in the Technopark, where about 30,000 employees are working, of which over 95% are in their prime youth, do not have Beer/Wine Parlours. They are forced to take hard liquor from the nearby Bar. Therefore, there is an urgent requirement to bring down the taxes on beer and wine. There is also a major policy shift to establish large number of Beer Parlours along with 2 Star/3 Star Hotels or even in common hotels to make available this low alcoholic beverage to the younger generation.  If this is not done, the Government may unknowingly make all the younger generation, habitual drinkers of hard liquors and not only the future generations become alcoholic but also the Government has to spend most of its revenue generated from foreign liquor on their health care. The increase in consumption of low alcohol drinks will ensure that there will not be any drop in tax revenue. But, at the same time,  the health expenditure will also come down.

3.     Prevention of illegal trade of foreign made foreign liquor: Thirdly, the Government expect that any decent person in the State has to stand in the queue of the shabby Beverages Corporation’s outlets along with thugs and crooks.  This is the reason for the high surge in the sale of scotch and other foreign brand in the ‘smugglers market’.  Unconfirmed studies estimate that, the market for sale of scotch and other imported brands in Kerala is around Rs.750/- Crores per year.  The Government is not getting a single paisa as tax except from the sale of liquor in the Duty Free Shops. There is also a high prevalence of spurious liquor in the imported liquor market (which affects the health of its good citizens). The Government can immediately raise around Rs.100/- Crores, as tax, if  super market type of shops for imported brands and premium Indian brands are opened in all the district headquarters, where the high/upper class and the rich can walk-in, select their own brand rather than standing in the queue before the Beverage Corporation outlet officials. Delhi and other metros have already started these kind of shops.  This will not only ensure the availability of, again the quality liquor which will not affect the health of the people, but also the Government can immediately get a sizeable income from the sale. But the present taxing system on liquor may not be made applicable in this case, since the prices will become substantially high, when compared with the prices in the “smuggler’s market” and there will be few takers. Therefore, a 50 to 100 percent increase in tax may be ideal, where customers are even willing to give extra amount to the tune of Rs.300/- to Rs.500/- per bottle, since the liquor supplied is a genuine brand. This policy will  take care of the health of the upper and upper middle class and Government spend will be less.

4.     License fees for the Clubs and Wayside restaurants  When the Government started giving licenses for Bar in clubs, the fee was fixed at Rs.50,000 per year. Now, I am told that this almost equal to that of bar licenses.  Government has to issue licenses for beer and wine parlours in clubs, and in all types of small hotels in the level of ‘Aramam’ of the KTDC. The ‘Vazhiyoram’ project of the tourism department would have created a network of safe hotels, a boon to the travelling population, since they are controlled by the department. It is understood that one of the reasons it did not take off since, the beer/wine permit was not issued. There is a need for giving beer and wine permits to all the clubs and those wayside hotels under the department control. This measure will encourage the consumption of low alcohol beverages. This policy will again promote the low alcohol content beverages.