Draconian Divide & Rule Laws!!

It has been over 70 years since British left the shores of India. Of the umpteen laws of British Raj era, some have been more divisive between the States (Provinces) than others. One such law, each and every other State has passed (some during the erstwhile Raj, while others emulating neighbouring states) is the State Excise Acts.

States have the prerogative over control of Alcohol manufacture and trade in their respective jurisdiction. For the purposes of movement of trade, each such State is virtually a country with extremely tedious paperwork and bureaucratic hassles.

The control of alcohol business in different States, squeezing out every bit as excise duties and taxes to fill the coffers of the Raj, was the genesis of these draconian laws.

Strict vigilance and control over the manufacture, bottling and distribution process, is just the start of the chain of regulation. There is a team of Excise Inspectorate stationed in each of the Brewery, Distillery or Winery overseeing these operations. The establishment of Excise Inspectorate at various manufacturing centres is enshrined in the respective State Excise Acts, itself.

While at the distribution end, there are registers and paperwork, needs to be maintained by each and every outlet, be it a Liquor Store, Bar & Restaurant, Recreational Clubs, etc. and audited by the Excise department.

In addition, there are physical check-posts at the borders of each State ensuring the correct movement of alcoholic beverages. Many a State has enacted a Transit Clause in their Excise Laws, for movement of these goods via their State into neighbouring ones.  

Just imagine the huge resources spent/deployed by the States in ensuring compliance at various stages of the value chain. All these are ultimately paid for by the consumers of Alcohol.

One should bear in mind the enormous share of State Excise Duty in the State’s revenues. Added to this, certain State Governments have monopoly over the distribution (some at primary distribution levels while many others, at retail levels) and the stupendous amounts collected by these channels by porous Distribution Corporations, needs special mention.

At all these touch points, one can imagine the extent and amount of corruption that takes place, the greedy intent of State Governments’ in garnering more and more revenues by way of increased “Sin Taxes”  while the social purpose of controlling Alcobev industry take a backseat.

These draconian laws, added to the distribution monopoly in certain States, where manufacturers are not given a fair price for their products to be sold in that particular State, will definitely put the pressure on these manufacturers to find creative ways in recovering their costs and offsetting their margins.

My two cents:

Isn’t it time to do away with the State Excise Acts and bring about other means to compensate the States for their revenues?

Isn’t there a better way to moderate the distribution and sale of Alcoholic beverages?