The UDF government’s decision to reduce taxes on low-alcohol beverages has drawn sharp criticism from the opposition CPI(M), which has alleged that the move will increase liquor consumption, benefit liquor companies and harm society, especially the younger generation.
Leader of Opposition Pinarayi Vijayan, CPI(M) state secretary MV Govindan, former finance minister KN Balagopal and former excise minister MB Rajesh all attacked the proposal, while State Home Minister Ramesh Chennithala defended it, saying the government remained committed to gradually reducing alcohol consumption and availability in the state.
In a statement, Vijayan termed the decision to cut taxes on low-alcohol beverages as “highly suspicious” and said there was widespread criticism over allegations that the commercial interests of liquor companies were behind the move.
He said that while liquor produced from spirits currently attracted a tax of 251 per cent in the state, the budget had proposed reducing it to 120 per cent for beverages containing up to 10 per cent alcohol, which would amount to a concession of more than half.
Vijayan said higher taxes on alcohol had traditionally been used not only to raise revenue but also to discourage consumption. He alleged that this was the first time the government had proposed such a steep cut in liquor prices.
“When cheaper alcohol becomes widely available in the market, consumption will increase sharply,” he said, adding that even if these products were sold as low-alcohol beverages, the proposal would lead to greater alcohol use and could eventually push consumers towards stronger liquor.
Calling the policy misguided, Vijayan said it could mislead the younger generation and push society into a worrying situation. He also asked why the government had chosen to grant relief only for alcohol while failing to address people’s urgent livelihood issues.
“Is reducing the price of alcohol the priority of this government? What benefit will it bring to society other than harmful consequences,” he asked.
He also said that even minor changes in excise policy had attracted criticism in the past, with religious and community organisations repeatedly warning that such steps could increase alcohol consumption.
Anti-liquor organisations had raised similar concerns, he said. Vijayan called for strong resistance across political lines against what he described as proposals that would expand alcohol consumption, and urged society to protect future generations from alcohol and drug addiction.
Govindan said the previous LDF government had considered allowing low-alcohol beverages made from fruits such as cashew apples, which would have helped traditional farmers in the state. However, he alleged that the present proposal would allow anyone to set up distilleries and manufacture low-alcohol beverages for sale.
“This is creating the ground for corruption,” Govindan alleged while speaking to reporters.
Balagopal said the previous LDF government had deliberately avoided creating a separate tax slab for low-alcohol beverages because it did not want to encourage their entry into the market. “We decided against it because it could lead to wider alcohol consumption,” he told a television channel.
Rajesh alleged that the tax concession would enable the large-scale sale of ready-to-drink alcoholic beverages in the state under the guise of low-alcohol products and mainly help corporate liquor companies. He claimed that these drinks would become widely available through Bevco outlets and cause a revenue loss of around Rs 600 crore to the state exchequer.
Rajesh also alleged that the proposal had been shaped by liquor industry interests and demanded that the government explain the basis for the concession. He further alleged that a Karnataka-based liquor lobby was behind the decision and sought clarification from Chief Minister VD Satheesan.
Defending the proposal, Chennithala said the government had not allowed any new bars since coming to office and insisted that its policy was to gradually reduce alcohol consumption and availability in the state.
He also alleged that the previous LDF government had liberalised liquor availability and had tried to promote the production of low-alcohol beverages from fruits. “No one should question our sincerity on this issue. We have a clear policy,” Chennithala told reporters.
The tax proposal has now become a fresh point of political confrontation in the state, with the CPI(M) alleging that it will widen alcohol consumption and favour the liquor industry, while the government says its broader policy remains aimed at reducing drinking and limiting availability.
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