THE NEW INDIA Have Bottle, Will Drink

Queues outside liquor shops stretch as far as the eye can see, with hundreds lined up exhibiting a shameless disregard for physical distancing. Despite a COVID-LED hike in prices, the average Indian seems to be doing everything but ease up on the bottle

The morning of May 4, 2020, was one that dawned with a definite spring in the step for a large cross-section of Indians. After all, come 10 am and the curtains (read ‘shutters’) would go up on the best show in every Indian town. And for this spectacle, many headed out from their homes in the wee hours itself. Awaiting them behind those silken curtains was the sustenance they had been deprived of for weeks. Sure, Version 3.0 of the Lockdown in the dreaded COVID-19 battle was beginning but the relaxation provided by the Indian Government meant that their sorely missed dose of daily tipple would soon be at hand, to behold, celebrate and then to down with an unabashed flourish. Finally, liquor sales were on again – the manna from the heavens was back.

It is a different story that May 4, 2020, saw most of these Bacchus aficionados go through a day they would rather not relive in a hurry. Outside liquor stores, snaking queues stretched as far as the eye could see, with hundreds in the line jostling and pushing one another with a near-spiteful disregard for physical distancing amid the COVID-19 threat. The lawenforcers tried to rein in this misplaced reverie, but even their wailing sirens and idling motorcycle engines could not wake up this mélange to the reality of a strict police ‘bandobast’. The latter’s zero-tolerance policy soon saw nerves running frayed as teeming millions refused to follow the set norms and etiquette required in such times. What followed was a foregone conclusion. Nearly all the shops across the country downed their shutters within minutes of opening.

PRICE HIKE BUT REVELRY CONTINUES

Later the same evening, the revelry was further cut short by announcements by various state governments, of a COVID-19 fee that would be imposed on all liquor sales, with the increase in prices ranging from 10 per cent in some states to 70 per cent in the National Capital, New Delhi. A day later, Andhra Pradesh announced a massive 75-per cent price hike on liquor sales, while Karnataka also imposed a 17-per cent pandemic fee on liquor sales. Other states followed suit.

Another day later, most Indian states announced an increase in excise duties on petroleum products, with both petrol and diesel becoming dearer. While some states attributed the price hikes to an attempt to discourage consumption, others admitted candidly that this was a means to make up for the losses incurred by the 40-day shutdown of liquor sales. Whatever the reason, the announcements had no impact on the turnout witnessed at liquor vends the very next day, as millions clambered on to their scooters and motorcycles, and millions more jumped into their cars — all headed for manna.

WHAT MAKES SO MANY DRINK?

It is not easy to explain away what takes over so many, causing them to cast care and fears aside to greedily clutch that slim bottleneck or grab the wide brim of the glass, in times as bad as we are facing today. The only simple explanation is that liquor (should we be polite and call it an ‘alcoholic beverage’?) is an intrinsic part of Indian life and lifestyles now. Some months back, a report in the ‘Lancet’ journal revealed that liquor consumption per adult per year in India went up by 38 per cent between 2010 and 2017 — up from 4.3 litres to 5.9 litres — predominantly on the back of freer familial and cultural values, as also the inclusion of a greater number of women in the drinkers’ list. Multiply that per-person consumption by India’s adult population for the period under review, of over 50 crore and you get a whiff of the sheer scale and numbers involved.

Today, India and Indians are well and truly hooked to alcohol. Here,

A report in the ‘Lancet’ journal revealed that liquor consumption per adult per year in India went up by 38 per cent between 2010 and 2017

we are not just talking about our masses and classes; we are also talking about our administrations and state governments. Such has been the advent and the resultant impact of liquor sales and revenues on our country’s finances, right down to the grass-root level, that playing footsie with this particular damsel is cause for economic consternation (if fiddled for a short while) and financial doom (if the interference lasts

longer). More on this in a while… PEOPLE: CULTURE & LIFESTYLES

A plethora of research papers and analysis have shown that every third Indian adult likes his daily dose of liquid gold. And all of us who have been around for a generation or two have seen this phenomenon manifest itself more and more across India. The economic

liberalisation kicked off in the early 1990s and the opening up of the Indian market did not just shore up our then-sagging economy, it also impacted our lifestyles. And not all in a bad way. As millions of Indians travelled the world crooning the paean of business and commerce, they also picked and brought back with them the ethos and habits of those that they visited. Over years and decades, these percolated across the length and breadth of the country.

A recent BBC report explored the drinking habits and trends of people around the world, and how this indulgence metamorphoses during emergencies such as the ongoing COVID-19 scourge and the resultant lockdowns and ‘quarantined’ life. Let’s face it. Being allowed to step out of your home for an hour a day to exercise or pick up essentials

As excise inflows form a major chunk of states’ budgetary calculations, a dip in these receivables is a double-whammy

Today, India and Indians are well and truly hooked to alcohol. Not just the people but the Centre

and state governments

as well

and then being self-confined is, for most, tantamount to a fullblown quarantine. Even in normal circumstances, many tend to reach for the glass at the end of the day, to ‘welcome’ the evening. Some do it because they like it, others because it is a way to cope with things around them, and others still because they want to blend in. Over time, those in Category 3 graduate to Categories 1 or 2. And newer ones join Category 3. The dance goes on; the number of dancers increases.

GOVT: BIG BUSINESS IS GOOD

Having sifted through the people, let’s sort out where the authorities stand as far as the liquor industry and sales are concerned. They, to put it mildly, are in the sweet spot, in the ‘zone’ if you will, so far as things keep moving along nice and smoothly. Put together, India’s state governments net over Rs 150,000 crore annually in excise collections alone from liquor sales. Bung in the overall sales figures, VAT collections in some states, ancillary and support industry sectors for alcohol manufacture, raw material production, sales and distribution activities, retail outlets and real estate, marketing and brand developments… This is one gravy train that India’s state governments need to ensure keeps chuffing along.

As stated, the Indian Made Foreign Liquor (IMFL) sector pays over Rs 1.5 lakh crore in excise and other duties annually to state governments. Other than the levies, they also provide direct and indirect employment to over 10 million people countrywide, including over 4 million farmers. Liquor manufacturers alone also support ancillary industries such as bottles, plastic and paper, which pull their own weight with a turnover of over Rs 5,000 crore. And that’s the reason that even a 40-day shutdown in

liquor sales can be calamitous and play havoc with a state’s finances, especially in troubled times such as today when states are having to fork out massive unbudgeted amounts to battle the COVID-19 pandemic. DEPENDENCE ON LIQUOR SALES

Clearly then, state governments are deeply dependent on the revenues and levies that come in from

liquor sales, as these make up nearly 75 per cent of their overall collections annually. Typically, liquor companies pay excise duty on the manufacture and sale of liquor in the states and Union territories. Further, states also receive special levies on imported foreign liquor, transport, and label and brand registration. Admittedly, the Goods and Services Tax (GST) is the biggest revenue-grosser for states, but in the recent times of the pandemic, states’ share of GST has not been reaching