Governments like the revenue from alcohol but will not make reasonable laws to administer the industry well.
Soon you can buy your favourite alcohol online as one of the largest revenue generators for the government – the alcohol industry – may soon start its operations on the e-commerce platforms. “The progressive states will be the trendsetters and I expect some to start this sooner rather than later,” Amrit Kiran Singh, Executive Chairman of International Spirits and Wine Association of India (ISWAI), told Samrat Sharma of Financial Express Online in an interview. In fact, Karnataka had already moved in this direction but retailers’ concerns were not properly addressed, Amrit Kiran Singh added. Highlighting the government’s hypocrisy as a major hurdle in the growth of the industry, he said the Rigveda mentions Somrus for the Gods and Surra for the common people, thus alcohol is as old as Hindu civilization itself, so why this hypocrisy now?
Here are the excerpts of the interview:
How soon can we expect alcohol to be sold on e-commerce platforms in India?
Outside GST, alcohol is the only significant revenue stream controlled by the states. Hence, states are trying to ensure this revenue stream is optimised. E-tailing is contributing significantly to the expansion of the economy in all other industries. It seems the perfect time for states to use it as a tool to increase their revenues. The progressive states will be the trendsetters and I expect some to start this sooner rather than later. In fact, Karnataka had already moved in this direction but retailers’ concerns were not properly addressed. Now is the time!
Do you think alcohol can come into the GST regime?
The states decided that they will support passing the Constitutional Amendment Bill on GST only if alcohol remains outside GST. They believe they need it as a buffer to protect themselves in case GST payments from the Centre are delayed. It’s something the States and Centre have to work out between themselves.
Are the government policies supporting the alcohol industry?
The progressive states are making huge strides – Maharashtra, for example, had set up a special committee to significantly improve Ease Of Doing Business(EODB) in the alcohol sector and quickly implemented huge reforms. Even states like UP have almost doubled their revenue in two years through EODB, premiumization, track & trace, and programs to curb irresponsible consumption. In fact, Neeti Aayog has lauded UP’s efforts and sent out the UP case study to all state Chief Secretaries as an example of what can be done to supplement state revenues.
On the other hand, there are a few states that have not recognized this huge opportunity and corrupt administrators are still caught up in games for personal benefit. I guess it’s only a matter of time before all states will have a policy in place that maximizes their revenue from alcohol while installing sufficient guardrails to curb irresponsible consumption.
What are your suggestions to boost the alcohol industry in India?
As an industry, we believe that if you chose not to drink, that is fine. If you chose to drink, however, you must only drink responsibly. Having said that the UP example is worth emulating if you wish to boost your revenue and Neeti Aayog has recommended it to the states. The policy is based on 4 pillars: Premiumization, improve EODB, effective track & trace to curb non-excise paid stocks from being sold in the state, and programs to curb irresponsible consumption of alcohol.
What are the alcohol industry’s current challenges in 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. The examples of government hypocrisy are endless.
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.