Rethinking Liquor Laws in India: Taxation, Health, and Monopolies

Context

Recently, Delhi Chief Minister and some other leaders are behind bars because of corruption charges against them in liquor policy for Delhi.

Enroll now for UPSC Online Course

Issues with Current Liquor Laws in India

• Excessive Taxation: India’s liquor taxes are extraordinarily expensive, frequently exceeding 200% domestically and 150% for customs charges, burdening customers financially.
• Impact on Health: High taxes encourage customers to buy lower-quality, cheaper alcohol, raising health hazards, particularly among low-income individuals.
• State Revenue Dependence: States rely heavily on alcohol taxes for revenue, but Bihar’s prohibition demonstrates that alternatives exist for state financing.
• Complicated Tax Structure: Liquor is not subject to the Goods and Services Tax (GST), which complicates the tax system. Including it could simplify taxation and bring it in line with other items like cigarettes.
• Government Monopoly in Sales: Current rules frequently result in government monopolies on spirits sales, which can encourage corruption and create impediments for private firms.
• Licence Requirements: The license requirements on serving liquor at eateries and social gatherings can be literally taxing, restrictive, and harassing.

Enroll now for UPSC Online Classes

Conclusion

To cut red tape and encourage a more positive economic and social climate, licence requirements for the sale and consumption of alcoholic beverages in public areas should be made simpler.

DOWNLOAD PDF