Why states’ views on high taxation of alcohol make no sense
A strong puritanical streak runs through middle class India. In that respect, we are like the US. The British also had it during the Victorian era, yet managed to rid themselves of it. Their Prime Minister, Boris Johnson, exemplifies the change. He is hugely popular despite his flamboyant, no-holds-barred lifestyle. Puritanism and hypocrisy often go together. Mahatma Gandhi was a puritan, but he was not a hypocrite. He had antiquated notions of sex and alcohol. Yet, he stood by them with unflinching honesty. The American government imposed prohibition in the early part of the last century. It was an unmitigated disaster, leading to massive corruption and increased crime. Only the likes of Al Capone, corrupt officials and the mafia benefited. The realisation dawned that as far as alcohol is concerned, outright bans don’t work; only a policy stressing moderation does.
As everybody knows, in the “dry” states of Gujarat and Bihar, it is easy to buy alcohol. The trouble is that by doing so, you are breaking the law. Hence, it only encourages disrespect for the law. If you can easily break a stupid law, then you feel you can break any law, however well-meaning and beneficial it may be for society. The dividing line between a bad and good law gets blurred. To me, that is the most pernicious aspect of prohibition.
However, the main thrust of this column is elsewhere, namely the short-sighted and foolish view of the authorities on the taxation of alcohol. It is widely accepted that excess drinking of spirits like whisky, rum and vodka is more harmful to health than wine or beer, for the simple reason that the alcohol content of spirits is much higher than that of wine or beer. In fact, doctors say that a glass of red wine is good for you. In most countries, wine and beer are sold in provision stores, whereas the outlets for spirits are restricted. Not in India, however. Wine and beer are equated with spirits, and can only be sold at licensed liquor shops. In Maharashtra, you even need a liquor permit for such purchases. Worse, wine is taxed so heavily in India that the cost of a bottle of any decent Indian-made wine is close to double that of a bottle of Indian whisky or rum. To me, again, that’s stupid. Tourists worldwide now tend to drink wine and beer, rather than spirits, when they travel. Hence, such low-alcohol content beverages should be easily available at a reasonable price. China does exactly that, and gets five times as many foreign tourists as we do. Indians, too, should be weaned away from spirits, towards wine and beer.
Most wine is made from grapes and their cultivation brings income to farmers. There are several areas in India where the climate and soil are ideal for wine-grape vineyards. I can think of three offhand: near Nasik, Pune and Bengaluru. This is where Indian companies make decent, even exportable, red, white and sparkling (akin to champagne) wine.
Recently, I spent a weekend at a friend’s farmhouse about 20 km from Nasik. There are 12 similar farmhouses in the same complex. Each covers 1 acre, half of which comprises a vineyard. In other words, a total of 6 acres of vineyards in the complex. A nearby fresh-water lake supplies the necessary water. An Indian wine-maker in the area buys the grapes, which are only harvested after a consultant has checked that they are at the correct sugar level. The 6 acres produce an average of 18 to 24 tonnes of grapes. There are plenty of other farms in the neighbourhood, big and small, which grow both table and wine grapes, providing farmers and labourers good livelihoods. A rough calculation shows that the production cost of a bottle of wine is around Rs150. For heaven’s sake, or more for farmers’ sake, since they are in the news, why should this wine be so heavily taxed that it eventually sells for several times as much! That’s patently ridiculous.
Himachal Pradesh is probably the only state that has had a sensible policy on alcohol for years. It allows wine made from fruit grown in the state to be sold in ordinary shops. It may be news to some that wine can also be made from apples, plums, peaches and cherries, all of which grow in abundance in Himachal (sadly, grapes don’t). The farmers, the retail outlets, and the government benefits — and the consumer gets a drink with low-level alcohol. I should add that the Himachal fruit wines are really not up to international standards, as are some Indian wines. But then, wine-making takes time and entails a long process of trial and error before it becomes more acceptable.
Goa, apart from its famous feni, now makes some excellent gin, along with a variety of other spirits, entirely from Indian ingredients. One entrepreneur, Desmond Nazareth, makes tequila from the same cactus-like plant, agave, used by the Mexicans to produce their world famous alcohol. He found that agave grows wild in many parts of India, so he set up a plantation in Andhra. The juicy flowers of the Mahua tree, which grows all over central India, have been used for centuries by tribals to make a potent brew. That caught Desmond’s attention and he refined the juice of the flowers by triple distillation to make a first-rate liqueur. Unfortunately, most of these concoctions mainly sell only in Goa, where the taxes are low. Once taken out of Goa, heavy taxes in other states kick in, making them far too expensive. “Make in India” should not be a slogan just for manufactured goods, but should benefit our farmers and agricultural entrepreneurs as well.
— The writer is a veteran journalist
