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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Investing in EV Industry
By Vanshika Yadav
1- Growth potential of EV industry
Are external factors conducive for EV sector to grow?
Majority of corporations are becoming more socially and substantially focused, they are following ESG norms (Environmental, Social and Governance focus). So, they want to invest in initiatives that promote sustainability of the world. There is a lot of push in terms of developing the entire mobility system. Even the government policies are somewhat promoting the EV market. For example, European Union has started to levy a lot of taxes on conventional sources of transportation. EV industry is getting a lot of external support, which forms the right set of conditions for it to grow. In order to assess the potential of the industry, it is also very important to assess whether or not EV industry can grow profitably. There is a mass adoption of electric vehicles. A report published by NITI Aayog (called India’s Electronic Mobility Transformation) estimates that by the year 2030, the EV sales penetration in India would stand at 70% for commercial cars, 30% for private cars, 40% for buses, and 80% for 2 and 3 wheelers. According to a study published by Auto News in Europe, by the mid-decade EV sector profitability will match internal combustion engine based vehicles. A bunch of developments will keep on happening and people or industries who are participating in the EV industries will make good profits going forward. Since, the growth potential of EV industry is massive, people are going to buy EVs and companies are going to get more and more efficient in terms of driving their profitability.
2- Scope of EV industry in India
First, considering the brands and companies providing the final product. Traditional players (Tata, M&M, Maruti, Bajaj) who used to manufacture traditional cars and bikes are now getting into EV space. Second, consider OEMs (Original Equipment Manufacturers). Battery is one of the most critical component of any EV and it costs approximately 40% of the entire amount which implies that the selling price of this component will be very high. Electronic motors, power electronics, vehicle integration ranges from 10-20% of the amount. OEM component manufacturing must scale up in India, for EV industry to become big. If the EV components are imported, there will be a lot of import duty, there will be a lot of skilled man power required, among other issues. Since EV is such a big opportunity, the governments are pouring in insane amount of money to build this industry. The governments would start by supporting the OEMs. In India, there are multiple challenges in terms of manufacturing batteries and there is a national mission on this front called the National Mission on Transformative Mobility and Battery Storage, which shows that the government realizes that India needs to build up its OEMs system in order to create and structure the EV industry. This implies that there will be a lot of investments by the government, going forward. Also, the government is running a Production Linked Incentive scheme for ACC (Advanced Chemistry Cells) battery storage manufacturing at an outlay of ₹18,100 crore, which will incentivize domestic production firms that have been allocated ACC production capacity (with cumulative capacity for all beneficiary firms combined together 50 GWh). Third, consider how the government is supporting infrastructure. The government of Karnataka has introduced a comprehensive EV policy to attract EV makers. Tamil Nadu has come up with another supply ecosystem where they are trying to build OEMs, also the government has provided a lot of administrative and investor related support to EV industry. This industry is already growing and seems extremely lucrative, also the situation all in all looks conducive for accelerating the next leg of growth.
3- Investment scope of EV industry
Battery manufacturers like Amara Raja Battery Limited, Exide India, leading brands like Hero Motocorp (which has a massive distribution system already in space) are some of the good stocks to bet on considering the EV market boom in future. Indian Oil Corporation Limited (IOCL) will play a different role altogether. For example, IOCL with Sun mobility, has launched a battery swapping facility. As the EV industry grows, it will require charging stations and maintenance. So, IOCL can get into that business very easily. Investment in EV oriented Smallcase can also turn profitable in long run.
Where is the EV industry headed?
Apart from policies relating to OEMS, the infrastructure has seen growth like charging systems, PLI schemes for battery manufacturing, new plant expansions, and new facilities have come up. The government plans to set up 8-10 industrial units near ports which may give certificates for accepting old vehicles and also recycle vehicles from India and abroad. Lithium-ion battery prices have dropped over last few years. Whereas, petrol and oil prices have gone up. So, the Total Cost of Ownership (TCO) between electric and internal combustion engine based vehicles has increased hugely. Despite the issues faced due to pandemic, Hero Electric had a growth over the previous year of about 15%, which indicates a positive momentum in EV industry.
Vanshika Yadav