Union Budget 2020 India: The government likes the revenue from alcohol but will not make reasonable laws to administer the industry well.
Budget 2020 India: One of the biggest pains of the alcohol industry is the unreasonably high customs duty on the import of scotch, a bulk material used for the premiumization of Indian whiskeys. “We would expect the government to reduce the customs duty on this important raw material from 150% to a reasonable value,” Amrit Kiran Singh, Executive Chairman of International Spirits and Wine Association of India (ISWAI), told Samrat Sharma of Financial Express Online in an interview. Social stigma and government’s hypocrisy have added to the woes of the alcohol industry, Amrit Kiran Singh added. Here are the excerpts of the interview.
Expectations from the upcoming budget
The only significant aspect of the alcohol business that the Central Government influences are the customs duty on import of scotch. Imported scotch is a raw material that is blended into Indian whiskeys to improve its taste. This import benefits Indian brands (Made in India) and helps in premiumization, which in turn improves the state’s revenue collection. It also supports WHO’s guidelines to member states asking them to encourage policies that make consumers “drink less but drink better”.
80% of scotch imports are bulk scotch used for blending into Indian brands and only 20% are imported as bottled products such as Johnnie Walker, Chivas Regal, and Jack Daniels. I would expect the government to reduce the customs duty on this important raw material from 150% to a reasonable value for the reasons mentioned above.
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Current challenges in the alcohol industry of India
The biggest challenge for our industry is the hypocrisy of governments. They like the revenue from alcohol but will not make reasonable laws to administer the industry well. So legal drinking age in Delhi will not be brought down to a reasonable 21 years but will continue to be 25 years ( you can vote, marry and join the army at age of 18 years) because the opposition will use any such move to brand you as a party that is promoting alcohol consumption.
For the same reason, an adequate number of drinking places will not be licensed causing millenials to drink illegally in cars, parks, beaches. Such hypocrisy makes it difficult to curb irresponsible consumption giving the industry a bad name. The examples of government hypocrisy are endless.
Hypocrisy is the biggest barrier to curbing irresponsible consumption. After all why this hypocrisy? The Rigveda mentions Somrus for the Gods and Surra for the common people. Alcohol in India is as old as Hindu civilization itself. There was no hypocrisy then, or during the Mauryan empire. As a society, we knew how to consume alcohol responsibly then. So why this hypocrisy now? We need to have a pragmatic approach to alcohol in India and administer it well to curb irresponsible consumption.