The lovely tale of Liquor
during Lockdown and before
At every stage, addiction is driven by one of the most powerful, mysterious, and
vital forces of human existence. What drives addiction is longing —
a longing not just of brain, belly, or loins but finally of the heart.
Cornelius Platinga
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The use of alcohol in India for drinking purposes dates back to somewhere between 3000 and 2000 BC. An alcoholic beverage called Sura which was distilled from the rice was popular at that time in India for common men to unwind at the end of a stressful day. . Yet the first mention of Alcohol appears in Rig Veda (1700BC). It mentions intoxicants like soma and prahamana. Although the soma plant might not exist today, it was famous for delivering a euphoric high. It was also recorded in the Samhita, the medical compendium of Sushruta that he who drinks soma will not age and will be impervious to fire, poison, or weapon attack. The sweet juice of Soma was also said to help establish a connection with the gods. Such was the popularity of alcohol. Initially used for medicinal purposes, with time it evolved and became the beverage that brought life to social gatherings, and eventually consuming alcohol has become a habit for many.
With such a rich history of not just humans but also of the gods,
what is a worldwide pandemic to stop anybody from drinking?
. . .
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According to a report released by the World Health Organisation (WHO) in 2018, an average Indian drinks approximately 5.7 liters of alcohol every year. In a population of casual and excessive drinkers, with the shutters of liquor stores down, it must have been extremely difficult for “certain” people to survive lockdown. In the first two phases of lockdown, the desperation had quadrupled prices of alcohol in the Grey Market of India. Also, According to Google Trends, online searches for “how to make alcohol at home” peaked in India during the fourth week of March, which was the same when the lockdown was announced. As a consequence, a few people died drinking home-brewed liquor. People committed suicide due to alcohol withdrawal syndrome. Owing to the worsening situation and to reboot the economy, some states decided to open licensed liquor stores in the third phase of the COVID-19 Pandemic lockdown in India. This decision was the worst best decision the state governments could take. The kilometer-long queues in front of liquor stores were evidence that a pandemic can turn your life upside down yet your relationship with alcohol cannot move an inch.
The love in the hearts of those who are addicted was explicit. We might have seen addiction, we might have witnessed desperation but what happened in the month of May was madness, not just in terms of the way people pounced but also in the way the government earned. According to a report by Hindustan Times, on the first day of the third phase of Lockdown, the Indian state of Uttar Pradesh recorded a sale of over Rs 100 Crore from liquor. On the second day of the reopening of Liquor stores, Karnataka reported sales of 197 crores in a single day which was the largest ever. Eventually, the prices of Liquor were hiked to 100% to discourage people from drinking.
. . .
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There was a special corona fee that was imposed in Delhi by Chief Minister Arvind Kejriwal. A 70% corona fee was imposed in Delhi, yet the sales did not drop. The entire situation was a disaster for the law enforcement officers, social distancing was easily abandoned and a basic code of conduct was happily violated. Despite the chaos created, the states continued to collect revenues. Home delivery of alcohol was allowed in Maharashtra and e-tokens were sold in Delhi.
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Demand for liquor is inelastic which means that
the sale of alcohol is not much responsive to change in prices.
In general, since alcohol policy is a state subject in India, revenue from Liquor is a cash cow for state governments. In 2018 and 2019, four states collectively collected about 20,000 crores in taxes from the sale of liquor. As much as the state earns from the sale of Liquor it is undoubtedly, a threat to the Economy. Consumption of alcohol has dire health consequences. When a person consumes an alcoholic beverage, there is a rise in BAC because of which there is a gradual and progressive loss of driving ability because of an increase in reaction time, overconfidence, degraded muscle coordination, impaired concentration, and decreased auditory and visual acuity. This is known as drunken driving. (V. M. Anantha Eashwar, 2020) Drunken driving is the third biggest cause of road accidents and over speeding in India. Road accidents are not it; alcoholism causes sleep problems, heart, and liver issues. Also, it is not about an individual’s life, it ruins the lives of all people concerned.
Addiction also causes economic loss. In 2000, Vivek Benegal and his team assessed 113 patients admitted to a special de-addiction service for alcohol dependence. They found that
the average individual earned a mean of ₹1,661 but
spent ₹1,938 per month on alcohol, incurring high debt.
They also found that 95% did not work for about 14 days in a month. They concluded that it led to a loss of ₹13,823 per person per year in terms of foregone productivity. A more recent study, Health Impact and Economic Burden of Alcohol Consumption in India, led by Gaurav Jyani, concluded that alcohol-attributable deaths would lead to a loss of 258 million life-years between 2011 and 2050. The study placed the economic burden on the health system at $48.11 billion, and the societal burden (including health costs, productivity loss, and so on) at $1,867 billion. “This amounts to an average loss of 1.45% of the gross domestic product (GDP) per year to the Indian economy,” the study said. (Mint, 2020)
Setho ka Gaon
With each passing day, the ‘curtain of separation’ weighs down on the women of Afghanistan, paving the way for tyranny to thrive.
Arth
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INDO-CHINA: AN ACCOUNT OF TRADE RELATIONS
By Abhyuday Singhal
India and China are two nations which share their international borders with each other. Indo- Chinese or Sino-Indian relations, refers to the bilateral relationship between the two countries. Even though the association has been cordial, but there are cross-border disputes and economic tensions from time and again, that have led to political and economic tensions between them. India and China are the two most populous and fast-growing countries in the world. The Indian economy will become a USD 3 trillion Economy during the year 2019-20. It is now the 6th largest economy in the world and aims to grow into a USD 5 trillion economy by 2024-25, which will make India the 3rd largest economy in the World. The International Monetary Fund (IMF), in its ‘World Economic Outlook’ has projected a growth rate of 7% in 2019-20 and 7.2% in 2020-21 for India. The increasing diplomatic and financial dependence on each other have led to increased trade relations between the two great nations.
The two giants, not only of Asia but also of the world, are in constant talks with each other to strengthen their trade relations and if possible, keep on growing without significant change in their tariff and import/export duties for one another. All the dialogues regarding the trade agreement began in 1980s and finally in 1984, the India and China entered into a Trade Agreement, which provided them with the status of Most Favored Nation (MFN). It was later in 1994, that both the countries agreed to sign on an agreement to avoid double taxation.
Though, the bilateral trade has increased four-folds in the past decade, initially the trade was in favor of China. But recently, there has been a remarkable turnaround as the Indian imports of Chinese products are decelerating at a growing rate. India's exports to China grew by 31% in April- January 2019, increased from USD 10 billion in April-January 2018 to USD 14 billion in April- January 2019. Despite substantial volume of imports from China, of late, India's import growth from China shrunk from 24% during April to January 2018 to (-) 5% during April-January 2019. The cumulative effect of the increase in exports from India and decrease in imports of Chinese goods, has resulted in the Indian trade deficit to China to fall from USD 53 billion in April-January 2018 to USD 46 billion in April-January 2019. This is possible because of shift in taste and preferences for Chinese goods along with growing and competitive Indian production capabilities, coupled with change in the consumption patterns of Indians.
The declining trend in the trade deficit between India and China in 2018-19 seems to be a good sign during the proposed Regional Comprehensive Economic Partnership (RCEP) deal between the ten member states of the Association of Southeast Asian Nations (ASEAN) and the six Asia- Pacific states including India and China. But is it Really a positive sign or is there a Chinese ploy, which should be dig deeper to find the truth? Interestingly, all the major commodities in which India’s import from China has declined, a corresponding increase has been noticed from Hong Kong markets. Mohit Singla, Chairman, Trade Promotion Council of India, says that India’s trade deficit with China has always been a major trade concern and the recent reduction in the trade gap possibly seems to be an attempt to camouflage the real value of trade deficit. There has been a one-
to-one product correlation of reduced export from China to India and corresponding increase from Hong Kong to India, during the same period. For all trade purpose and calculating trade figures China and Hong Kong may be treated as complementing entity.
It is interesting to point out that there is an ongoing economic conflict between the world’s two largest national economies, China and the United States and have imposed tariffs on billions of dollars’ worth of one another's goods.
US President Donald Trump has long accused China of unfair trading practices and intellectual property theft. India can be benefitted from the US-China trade war by tapping the export opportunities in both the countries. Major international firms that invest in China are exploring various options to shift their existing and fresh investments to other countries and India should tap this opportunity. Even India may be benefiting through increasing exports to US and a shift of foreign direct investment (FDI) to India. Tensions between the two countries have forced some manufacturers to shift their production process out of China to avoid higher tariffs. Hence, India could be a beneficiary of this. India can position itself strategically in midst of trade conflict specially under those categories on US has imposed hefty tariffs on Chinese products. India has benefitted from US-China trade war by exporting more to China like plastic, cotton, inorganic chemicals and fish. Interestingly, India has a revealed comparative advantage in some of these commodities.
India has become an attractive destination for companies to relocate supply chains from China after the recent cut in tax rate. No country gives a 15% tax rate in South-East Asia. US tech major Apple coming to India after the new lower tax regime will send a big signal to other foreign companies to explore opportunities here.
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References
• PHD Research Bureau: www.phdcci.com
• Economictimes.indiatimes.com