Centre to give up control on the manufacture of whisky, wine

The Centre is set to give up its control on the manufacture of whisky and wine, a long-pending move that will finally allow states to hand out brewing licences.

Updated on: Sep 14, 2015, 24:15:20 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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The Centre is set to give up its control on the manufacture of whisky and wine, a long-pending move that will finally allow states to hand out brewing licences. Experts say the transfer of this regulating power could give domestic brands a new high apart from reducing prices of potable alcohol and greatly incentivising small breweries.

A-barman-pouring-shots-a-very-popular-choice-in-bars-world-wide-Reuters

The Industrial (Development and Regulation) Act of 1951 gives the central government the authority to regulate the manufacture of industrial and potable alcohol, including the power to issue licences for production units. This has meant that the commerce ministry has been issuing licences for setting up alcohol manufacturing units across India while the states have been responsible for the rest. The states have thus been licensing distribution and sale, declaring prohibition, and preventing misuse of potable alcohol for non-potable purposes.

The states have opposed the mechanism, pointing out that they have complete control over the potable liquor business except issuing manufacturing licences. The issue has also been discussed in the Supreme Court which concurred with the states.

Many chief ministers had urged Prime Minister Narendra Modi to change the law in the spirit of “cooperative federalism”, arguing that potable liquor business had always been their exclusive domain.

Sources said the PM was in agreement, and had asked the commerce ministry to examine the issue.

Following an apex court order in the Bihar Distillery case of 1997 that gave states the authority to levy excise as well as all other controls on rectified spirit used for potable purpose, the law commission recommended the following year that states get exclusive rights over the potable liquor business.

It said this would improve state revenues while the loss to the Centre would be marginal.

Seventeen years later, the commerce ministry has accepted the commission’s recommendation and moved a cabinet note seeking amendment to the first schedule of the 1951 law.

The note, vetted by the law ministry, proposes to introduce an exception in item 26 of the first schedule which lists the category of industries regulated by the Centre.

The exception proposed is “fermentation industry except potable liquor”, thereby giving exclusive rights to state to regulate the liquor business.

A two-word change could bring major investment for the states.

“We have a national policy that doesn’t take into account state-specific needs,” a government official explained. “Once the amendment is notified, states can have their own policies as per local needs to promote entrepreneurship and attract investment.”

Sources said the amendment would help states deal with horticulture and farm waste as they would now be able to give licences for small brewing units. Farm cooperatives in Maharashtra had proposed small vineyards but were unable to meet the requirements of the central policy.

Now, with states set to get the power to issue licences, small breweries in Maharashtra and elsewhere could be around the corner.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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