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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Stock Split V/S Bond Share
By Avni Goel and Amandeep Singh Bhutani
MEANING
Bonus Share: Existing shareholders are granted free extra shares based on the amount of shares they own.
Example: A bonus share issue of 2:1 implies 2 bonus shares for every share held.
Effect on investment: The no of shares in portfolio increases by the number of bonus shares whereas the share price will get divided by the no of bonus shares issued. The investment value will remain the same.
Stock Split: The term "stock split" refers to the process of splitting current outstanding shares into numerous smaller shares.
Example: A split of 1:5 indicates dividing 1 share into 5 subsequent parts.
It’s known as 5 shares for every share held.
Effect on investment: The shares held will increase due to splitting of shares. On the other hand, the share price will be be divided by the no of the times the share got split. The shareholder might see an incremental increase in their portfolio.
OBJECTIVE:
BONUS SHARE:
1. Bonus shares given instead of declaring dividend.
2. To flow a positive sentiment for growth.
STOCK SPLIT:
1. Make share price affordable for the retail investors.
2. Understood as a positive sentiment for growth.
3. Increase Demand and liquidity. (Depends upon market conditions)
Effect on Balance Sheet
Bonus Share: The no of shares in share capital increase due to issuing of new shares in the market, face value remains the same. Whereas the reserves and surplus of the company will reduce by the total worth of shares issued.
Stock Split: The share capital in the balance sheet remains same but the face value of the share reduces and subsequently the no of shares increase.
Reverse stock split
A reverse stock split of 50:1 will make 50 shares into a single share. It is known as 1 share for every 50 shares held.
Objectives:
1. To turn penny stock into a reasonable stock.
2. To save the company from delisting by SEBI.
Fun facts:
1. After bonus shares, the future dividend remains the same since the face value remains the same, but it drops after a stock split because the face value decreases.
2. Following the bonus shares, current shareholders gain, while following the stock splits, both existing shareholders and potential investors benefit.
Recents:
1. Tide water oil announced a 1:1 bonus share issue and 5:2 stock split on 10th June. This means that if you hold 100 shares of this company, after the announcement you will have 500 shares.
2. Reddington India announced a 1:1 bonus issue on 7th July.
3. Sun Retail Ltd announced a share split of 1:10 and a
Avni Goel
Amandeep Singh Bhutani