Kerala chief minister V.D. Satheesan found himself embroiled in a controversy over a proposal to reduce taxes on low-quantity alcohol beverages in his revised budget presentation.
The proposal, incorporated into the new liquor policy, was introduced without prior discussion within the Congress or the United Democratic Front (UDF) on Friday. Following criticism from the Opposition, Satheesan assured that a decision would be taken only after consultations with alliance partners.
Satheesan had also backtracked on his stand regarding the privatisation of black sand mining on Tuesday. In both controversies, Congress leader and former PCC president V.M. Sudheeran emerged as a key critic. A Congress leader said the "double blow" from Sudheeran has left Satheesan on the back foot.
Sudheeran told reporters on Thursday that any proposal to reduce taxes on low-quantity alcohol beverages should have been discussed within the Congress and the UDF before being included in the revised budget.
A political battle has now erupted over the controversial “Bacardi Tax” linked to the state’s liquor policy. The previous uniform sales tax for Indian-made foreign liquor (IMFL) stood at 251 per cent. The Opposition-led Left Democratic Front (LDF) alleged that the proposed reduction in taxes on low-quantity alcohol ready-to-drink products, such as Bacardi Breezer, was designed to benefit Bengaluru-based Bacardi India Private Limited (BIPL). The LDF also alleged collusion between Satheesan and the company.
Satheesan rejected the charge and argued that it was the previous Left government that had first engaged with Bacardi. Replying in the Assembly, he targeted the second Pinarayi Vijayan government. “Within six months of Vijayan assuming office, then excise minister and present CPM state secretary M.V. Govindan had directed that applications from Bacardi India, SDF Industries and others be examined after defining low-alcohol beverages. So who engaged Bacardi first?” Satheesan had said on Wednesday. However, he clarified that a decision on the policy would be taken after discussions within the UDF.