Kerala's New Liquor Policy: 30% Tax Cut Leaves BJP, Left, Muslim Body Furious

The Kerala government's decision to slash taxes on low-alcohol beverages — from 251 per cent to 121 per cent — as part of a new liquor policy has upset opposition parties and a Sunni religious body.

The Bharatiya Janata Party and the Communist Party of India (Marxist), along with the influential Samastha Kerala Jem-Iyyathul Ulama, have questioned the decision. The latter, in its mouthpiece Suprabhaatham, slammed the new policy as “weak” and argued it could not be dismissed as “tax reform” at a time when the state is battling drug and substance abuse.

The BJP also questioned the speed with which the new government — the Congress replaced the CPM in mid-May, with VD Satheesan sworn in as chief minister on May 18 — cleared the tax cut.

Rajeev Chandrasekhar, the BJP's state unit chief, referred to a “midnight liquor deal”. He claimed Satheesan cleared the file at 10.12 pm on Sunday and the Additional Chief Secretary approved it early Monday, after which it was listed in the budget presented on June 19.

“Public welfare files wait for weeks and months. But a file benefiting a multinational liquor company moves at lightning speed,” he said, asking who would benefit from the decision.

He also accused both the Congress-led United Democratic Front and the CPM-led Left Democratic Front of subservience to the liquor industry. The LDF initiated the proposal and the UDF completed it, he alleged, though the CPM has also emerged as a critic of the Congress' move.

Former finance minister KN Balagopal said the previous administration — the LDF — had examined similar proposals but did not proceed due to concerns about the social impact.

Critics of the liquor tax rate cut have said it is designed to benefit the alcohol industry by making ready-to-drink beverages cheaper and thereby attracting new consumers, including young men and women. The LDF has said the UDF must withdraw the order.

Meanwhile, the controversy has also exposed divisions within the Congress-led coalition and among sections of religious leadership, turning what was framed as a “tax rationalisation” measure into a broader debate on public health, alcohol consumption, and the influence of the liquor industry.