THIRUVANANTHAPURAM: Amid mounting criticism from the Opposition, community leaders and even sections within the Congress, Chief Minister V D Satheesan has softened his stance, clarifying that the final call on permitting low-alcohol beverages in the state will be taken collectively by the ruling UDF.
Replying to the budget debate in the assembly on Wednesday, Satheesan said the category of low-alcohol beverages was introduced in the liquor policy by the previous LDF government and that the UDF government had only proposed a tax rate for it.
“Our government has merely fixed the tax. The liquor policy is decided by the UDF. If the front decides to permit its sale, the tax rate proposed in the budget will apply. If the UDF decides against it, there will be no sale. It is purely a political decision,” he said.
Rejecting allegations of a kickback behind the move, Satheesan said the process had been initiated by the previous LDF government. “Within six months of assuming office, M V Govindan, the Excise Minister in the second Pinarayi Vijayan government, took the first step. The previous government had informed the assembly that it had received an application from Bacardi India Limited and that they have amended the foreign liquor rules,” he said.
Satheesan said the previous LDF government had initiated steps to fix the tax rate for low-alcohol beverages based on Bacardi’s request, but could not complete the process due to the assembly elections.
‘Tax rates are fixed after proper study’
Dismissing allegations that the UDF government had rushed the decision, he said tax rates are routinely fixed in a time-bound manner after studying rates in other states.
“In 2018-19, the previous government fixed a 78% tax on IMFL with 40-60% alcohol content. It was later raised to 115% in 2022-23, yet remained lower than the tax on beer. Did they fix the 78% rate after accepting bribes from Johnnie Walker and Chivas Regal companies?” he asked.
Satheesan also dismissed reports that Excise Minister M Liju was unhappy with the tax proposal. He mocked the leader of opposition’s claim that permitting low-alcohol beverages would fuel alcohol addiction. “The Opposition appears deeply upset now. Yet, when they were in power, the number of bars in the state increased from just 28 to 900,” he said.
Mineral sand mining
Satheesan also ruled out any move to privatise mineral sand mining, dismissing Opposition allegations as baseless.
He said the Southern Kerala Economic Corridor proposed in the budget aims to build a “blended economy” by attracting large-scale private investment and positioning Kerala at the forefront of the country’s strategic and maritime sectors.
According to Satheesan, the project will be implemented jointly by the Centre and the state with the participation of a consortium of public sector undertakings, including KMML, Keltron, Travancore Titanium and NFTDC.
“There is no mining involved in the project; it is focused solely on value addition. The privatisation narrative is false,” he said.
The government, he added, is pursuing a “Neo Kerala” development model centred on strengthening the industrial and service sectors while attracting fresh investment.
‘Highest among states’
The revised budget presented by Satheesan proposed 120% sales tax for beverages with alcohol content between 0.5% and 10%, and 175% for those between 10% and 20%. According to the CM, these are the highest rates among Indian states.
‘Privatisation narrative false’
Satheesan ruled out any move to privatise mineral sand mining, dismissing Opposition allegations as baseless. “There is no mining involved in the Kerala Economic Corridor project; it is focused solely on value addition. The privatisation narrative is false,” he said.
