Psst, want a drink?

The ill effects of state control over liquor sales are playing out in Telangana right now.

It is high time that individual state governments and the central government recognised liquor as a normal consumption good, albeit with its own relatively high tax burden and age restriction on consumption, and treated its distribution and sale on par with the distribution and sale of beverages like tea and coffee.

The present practice of enveloping liquor manufacture and sale in a shroud of moral ambivalence and rigorous state control, exercised through state monopoly in several states, only creates inconvenience for consumers, in the form of artificial shortage, high prices, and, occasionally, spurious liquor that kills.

It should be noted that most rich countries refrain from treating liquor as a reluctantly tolerated form of poison, but do not suffer from added degrees of moral turpitude, morbidity, or loss of economic output on that account.

Telangana’s approach encapsulates the problem

The ill effects of state control over liquor sales are playing out in Telangana right now. United Breweries, maker of Kingfisher and Heineken brands of beer, has decided to suspend sales to the Telangana State Beverages Corporation (TSBC), the state-owned wholesale monopoly for Indian-Made Foreign Liquor (IMFL) and foreign liquor in the state. The company’s stock has taken a hit, as a result.

However, the company’s hand has been forced, as it has been sustaining losses as a result of the state government’s refusal to increase the price the Corporation pays the company for its products, even as costs have gone up. What is particularly galling for the company is that the state government has increased the retail price of beer but refuses to pass on any of the increase to the manufacturer. Further, the Corporation’s payments to the beer maker are in arrears.

The government does not fix the price of tea or coffee or any other consumer good. Demand and supply interact in a competitive marketplace to arrive at different market-clearing prices for different products and different grades of the same product. The question of supplies being suspended or companies facing arrears in payment does not arise.

When the Goods and Services Tax was introduced, liquor was kept out of its ambit and left for states to levy excise duty at rates of their individual choice. These rates can run up to several hundred percent. This not just makes liquor expensive for tipplers, but also creates problems for India in international trade negotiations.

Two levies on liquor

Imports of liquor face two kinds of levies. The import duty, as determined by the central government, is one. The other one is a duty designed to make the playing ground level for domestic liquor makers, who have to bear high rates of excise duty and other taxes at the state level. These countervailing duties can be astonishingly steep.

While the Centre can negotiate to lower the customs duty on liquor imports, it cannot undertake to lower the duties meant to countervail state-level excise duties. Excise on liquor is a major source of revenue for state governments.

Alochol is not culturally alien

Consumption of liquor is part of the culture for everyone, ranging from tribal groups to the most urbane communities. Poets and writers relish the free rein quaffing moderate amounts of alcohol grants their imagination. Lesser mortals use liquor to shed inhibitions that keep strangers as strangers, or prevent opening up to friends in a manner that strengthens bonds.

Intoxication is the term used to describe the aftereffect of intense aesthetic or pleasurable emotional experiences, for reasons that should redeem liquor from the nether side of morality where hypocrisy has pushed it.

Yet, a peculiar combination of caste culture and European puritanism catalysed into the cultural mainstream by theosophists and temperance workers who were active participants in the freedom movement has made a virtue of prohibition. The Telangana State Beverages Corporation has its corporate office at the ‘Prohibition and Excise Complex’ in Hyderabad. Prohibition is one of the holy grails of the Directive Principles of State Policy, along with scientific temper.

Shadow on gender relations

The generalised privileging of men in caste culture burdens women with all chores of the household and care for the young and the old, while the men are free to drink, carouse, bond, and relax after work. This leaves women resentful and hostile to drink. The reaction to vociferous expression of that resentment is often violent. The net result leaves drinking as a preserve of the elite, in its form as a shared social ritual of friendship, and of the subaltern, in its gender-segregated forms that often lead to domestic violence.

In excess, drink can do damage. But so can vitamin B12 or exercise. In moderation, drink, like most other things, adds to life, converting biological survival into joyful living. Hypocrisy over liquor comes in the way of moderate, dignified consumption that leads to conviviality. Hypocrisy over drink promotes animosity and violence. Hypocrisy also leads to excessive state control, shortages, and exorbitant costs. We need to lift both hypocrisy and state control over liquor and let it take its place among other fast-moving consumer goods.