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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Application of Non-Fungible Tokens in Finance
By Arnav Sinha
In the first half of 2021, a huge NFT and cryptocurrency boom was observed, with unprecedented monetary values being attached to NFTs. The first quarter of 2021 saw the sale of more than $2 billion worth of NFTs. Jack Dorsey, CEO of Twitter, received a bid of $2.9 million for an NFT of the first-ever tweet. The auction house Christie’s sold a digital collage by the artist Mike Winkelmann also known as Beeple, for $69 million.
Non-Fungible Tokens (NFTs) are a blockchain-based cryptographic asset that includes anything from artwork or collectables to music, video, and even virtual world assets. Ethereum blockchain is predominantly used to register the ownership of the digital asset and, in turn, supports the trading of the same. NFTs have far-ranging usage and application in various fields, including finance as well. Many companies have started investing in the idea of NFTs, and many startups have come up in this field.
One of them includes the union of NFTs and decentralised finance (DeFi) in creating NFTfi, a platform allowing its borrowers to post NFTs as collateral. Other companies like Stater, Lendroid, UniLend etc., also allow P2P lending and borrowing by leveraging NFTs and enabling their users to access liquidity while retaining ownership of their digital assets. NFTX is a platform that provides for community-owned index funds where one token represents ownerships in various categories of NFTs representing a spectrum of its market. Many trading platforms have come up, making trading of NFTs easily accessible to all. Some of them include OpenSea, Nifty Gateway, Rarible, NBA Top Shot etc. One can participate in these markets by creating a digital wallet consisting of cryptocurrencies. The sale of the NFT would then be permanently registered on a blockchain, and the same NFT would appear in one’s wallet.
NFTs have opened up the doorway to other industries in the finance sector, such as the insurance industry. Clearly, where there is risk involved, there is a possibility of insuring the same. The NFT market is characterised by much more varied risks than those present in the traditional markets. Certain NFTs have ‘gone missing’, people have lost access to their digital wallets, their accounts have been hacked, resulting in huge losses. Hence, platforms have emerged that help in hedging these risks and protecting the participants of the market. Companies like Nexus Mutual, Cover Protocol, Insured Finance, and Tidal Finance offer protection for smart contracts used in NFT trading. These platforms use a blockchain-basedP2P network that works on a decentralised model to outsource the pricing risk to a community, thus creating a prediction market. Other companies like CoinCover have embedded their product in several wallet platforms, enhancing its security by using features such as facial recognition etc.
It is common knowledge today that in the world of the financial supply chain, the majority of the documents, such as invoices, purchase orders etc., are digitally represented. This, in turn, involves risks such as duplication of documents, problems in authenticity and ownership of the same. The team at Centrifuge have come up with a beautiful solution to this problem by turning these financial documents into NFTs, registered on the Ethereum blockchain, making them unique, assignable and tradable. They have termed this class of assets as “Business NFTs” and more specifically as “Invoice NFT”, “Order NFT”, etc.
The above mentioned NFT markets and companies based on the same are challenging the traditional systems and revolutionising the way people define digital ownership and, in turn, helping us re-imagine new categories of financial services based on the same. There is a long way to go. However, this is certain, NFTs as technology have revolutionised many fields of our lives, and clearly, it is here to stay.
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Arnav Sinha
CHRIST (Deemed to be University), Bengaluru
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