THIRUVANANTHAPURAM: Kerala Chief Minister V.D. Satheesan on Wednesday clarified in the Assembly that the lower tax rates proposed in the state Budget for low-alcohol beverages would come into effect only if the United Democratic Front (UDF) collectively approves their inclusion in the new liquor policy.
Replying to the Budget debate, Satheesan stressed that the issue was not merely a financial decision but a political one that required consensus among all UDF constituents.
“Abkari policy is a political decision. It has to be taken collectively by the UDF,” the Chief Minister said. He added that a draft liquor policy would be prepared and discussed within the coalition before any final decision is made. If the UDF rejects the proposal, the sale of low-alcohol beverages will not be permitted in Kerala, he said.
In the Budget, the government proposed a new category of low-alcohol beverages, with a tax rate of 120 per cent for drinks containing 0.5 to 10 per cent alcohol and 175 per cent for beverages with alcohol content between 10 and 20 per cent.
Addressing criticism that the Excise Department had not been consulted, Satheesan said it was standard practice for tax proposals to be prepared by the Finance Department without extensive discussions with individual departments. He also dismissed allegations that the proposal had been rushed through the Secretariat, explaining that tax-related files traditionally move quickly in the days leading up to the Budget presentation.
The Chief Minister launched a strong counterattack against the opposition Left Democratic Front (LDF), accusing it of initiating discussions on low-alcohol beverages during its tenure. He cited official communications issued by the previous government after applications from companies such as Bacardi India and SDF Industries seeking recognition of a low-alcohol beverage category.
Satheesan further pointed to provisions in the LDF’s 2022-23 Abkari Policy that recommended encouraging beverages with alcohol content of up to 20 per cent. He also claimed that the previous government had amended liquor rules to facilitate the entry of low-alcohol products into the market.
Former Finance Minister K.N. Balagopal rejected the allegations, stating that the LDF had deliberately refrained from fixing tax rates for such products despite receiving requests, recognising the potential social impact of increased alcohol consumption.
The exchange triggered sharp political sparring in the Assembly, with both sides accusing each other of inconsistency and attempting to shift responsibility for the controversial proposal.
