Some Freaknomics? - For a Change!!

As per our Constitution, Article 47 states that "Government shall endeavour to bring about the prohibition of the consumption (of alcohol) except for medicinal purposes of intoxicating drinks." In reality this completely fails.

Many of us know that, Alcohol consumption is steadily increasing in developing countries like India and decreasing in developed countries from 1980’s.  It was estimated that that are 62.5 Million alcohol users in India. A study shows that per capita consumption of alcohol increased by 105.7% between 1970 and 1996 (over the 15-year period) (Source: Alcohol related harm in India – a fact sheet by INDIAN ALCOHOL POLICY ALLIANCE)

India is generally regarded as a traditional ‘dry’ or ‘abstaining’ culture (Bennet et al, 1993). Yet, it has one of the largest alcohol beverage industries in the world. The UB Group, for example is the third largest spirits producer in the world after Diageo and Pernod Ricard (ICAP, 2006c). India is the dominant producer of alcohol in the South-East Asia region (65 percent) and contributes to about 7% of the total alcohol beverage imports into the region. More than two thirds of the total beverage alcohol consumption within the region is in India.

There has been a steady increase in the production of alcohol in the country, with the production doubling from 887.2 million litres in 1992-93 to 1,654 million litres in 1999-2000 and was expected to almost treble to 2300 million litres (estimated) by 2006-07 (The Planning Commission  of India, 2003).

Though consumption is still low, patterns of alcohol consumption vary widely through the country. Punjab, Andhra Pradesh, Goa and the north-eastern states have a much higher proportion of male alcohol consumers than the rest of the country. Women tend to drink more in the states of Arunachal Pradesh, Assam and Sikkim in north-east; Madhya Pradesh, Chhattisgarh, Orissa and Andhra Pradesh in central and east India; and Goa in the west, compared to other states. 
(Source:F-Current Patterns and Trends – ALCOHOL ATLAS OF INDIA –WHO)

This is the trend shown in the recent study on Alcohol in India. Now, when it comes to revenue part there is large part of revenue come from Liquor. In 2006-07 the combined earnings of States from alcohol were estimated about Rs. 30,000 crore which was over 11.5% of tax revenues. In fact, liquour was the second largest contributor to the State’s aggregate revenue kitty after sales tax  which was Rs 1,20,709.15 crore.

The revenue generation from alcohol is a national phenomenon. Karnataka is leader with the excise collection of Rs. 4060 Crore while Uttar Pradesh is in second followed by Andhra Pradesh in third with Rs. 3650 Crore and Rs. 3250 Crore respectively. 

(Source: Can govt ignore alcohol's revenue earnings? - IBN)

My Reflection:

India is the one of the largest producer of Alcohol. This news may not be surprising to many of us; but, the thing is our constitution says one thing and the reality is totally different. The worried part is consumption of alcohol by youngsters has increased from 2 percent in 1990 to 14 percent in 2006 (below the age of 21) and among adults (between age group of 21-30) it is increased from 29 percent to 35 percent in the same timeline. One side the per capita consumption of alcohol is increasing on the other side Government revenue from alcohol is also increasing; whether the revenue from this is utilised for some development purpose or again it goes only to produce more alcohol that's a big question mark ?

Note: TASMAC (Liquour Company owned by Government of Tamil Nadu) revene for 2011-12 was Rs. 18, 081.16 Crore with increase of 20.82% and This year Kerala saw Rs. 70 Crore worth sale of alcohol during two onam days. The entire week revenue was approximately Rs .720 Crore. As per the recent study  Punjab tops the sale of alcohol followed by kerala.