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.
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Success Stoy: The Rise of Zerodha
By Vanshika Yada
“It is possible to be successful at business by questioning the true cost of revenue, valuations, and growth, instead of continuously chasing them. And that success is relative, impermanent, and a lot of luck too”, says Nithin Kamath, co-founder of Zerodha, India’s first and the largest discount brokerage firm by all measures, and one of the largest retail trading platforms in the world by activity. Zerodha became remarkable without ever advertising, or raising any external capital or debt. The founder believes in ‘the word of mouth is your true marketing’. Thus, with a very low operating cost, it was able to capture a large number of customers.
The Kamath brothers, Nithin and Nikhil Kamath, went on to launch Zerodha in 2010 with Rs. 5-10 lacs. The startup kicked off with a team of five people, which has gone up to an employee count of over 1100 today. From opening just 3000 accounts in 2010 to building a customer base of over 5 million in 2021, and an increase in valuation to USD 1 billion on June 29, 2020 (after it carried out a buyback plan of employees’ stock), Zerodha has been bestowed with the label of a unicorn. In 2020, the duo of the Kamath brothers made it to Forbes' list of India's 100 richest.
In order to stay competitive, the firm launched many products to expand its reach and to overcome some challenges they were facing.
Console- Central dashboard of a customer’s account that provide in-depth reports and visualisations
Kite- Trading and investment platform that eases customer’s experience to trade and transact Kite Connect API- Enables independent traders and startups to build an innovative trading and investment platform, also, using algorithms, retail traders can automate their trades
Sentinel- Enables creation of market alerts that can be customised based on price, trade quantity, and open interest
Z Connect- Blog facility regarding stocks, trading, and investment with Zerodha Varsity- Gives an extensive and in-depth collection of stock market and financial lessons Coin- Provides a commission-free purchase of mutual funds
Rainmatter- Social initiative that supports and funds individuals and organisations working on climate change, with a focus on afforestation, ecological regeneration, and livelihoods. Some of the projects funded under this initiative include The 1000 tree Project at SwaYYam in Bandipur and Wild Shaale at Centre for Wildlife Studies.
Zerodha also invested in some promising financial technology startups. These include Smallcase, which allows thematic investing – for instance, it offers you a readymade portfolio of companies expected to benefit from the electric vehicle revolution, Sensibull – an options trading platform.
After the success of Zerodha, Nikhil Kamath, younger of the Kamath brothers, went on to disrupt the asset management industry. He established True Beacon in early 2019 to change the way UHNIs and HNIs build wealth. The company was built on client alignment through a zero standing-fee model, a conservative investment approach combined with liquidity and tech-enabled transparency. Currently, True Beacon serves several sophisticated domestic Indian and global clients who want to capture India’s economic and equity market growth.
Vanshika Yadav