Why in the News?

A nine-judge Constitution Bench, with an 8:1 majority, affirmed the authority of State legislatures to regulate industrial alcohol.

What is the definition of “intoxicating liquor” with industrial alcohol?

• The SC’s ruling established that the term “intoxicating liquor” in Entry 8 of the State List should be interpreted broadly to include not only potable alcohol but also industrial alcohol, such as rectified spirit, extra neutral alcohol (ENA), and denatured spirit.
  • This definition extends beyond the popular meaning of “intoxicating liquor” as alcoholic beverages meant for consumption.
• Public Health Consideration: The ruling emphasized that alcohol, in any form, is a noxious substance prone to misuse. Hence, industrial alcohol, which can potentially be diverted for the production of illicit or harmful alcoholic beverages, falls under the regulatory domain of the States to protect public health and safety.
• Legal Precedent: The Court cited previous decisions where the interpretation of “intoxicating liquor” was not confined to just alcoholic beverages but also included forms of alcohol that could be detrimental to health if used improperly.

How does this ruling impact the balance of power between state and central governments?

• Strengthening State Autonomy: The ruling affirms that States have the legislative competence to regulate industrial alcohol according to Entry 8 of the State List.
  • By upholding the States’ right to regulate industrial alcohol, the judgment reinforces federalism and the autonomy of State legislatures in matters that fall within the ambit of their constitutional authority.
  • This challenges the Centre’s claim to exclusive control over industrial alcohol under Entry 52 of the Union List, which pertains to industries regulated by the Union for public interest.
• Restriction on Centre’s Authority: The judgment limits the Union government’s power and clarifies that Parliament’s control over industries under Entry 52 is limited and does not extend to regulating industrial alcohol in its entirety.

How does it impact the state revenues and public health?

• State Revenues: The ruling potentially enhances States’ power to levy taxes and fees related to the production, manufacture, and sale of industrial alcohol. This could result in increased revenue generation from excise duties on alcohol-based products and licensing fees.
• Public Health Regulation: Having greater regulatory control over the production and distribution of industrial alcohol will help the states curb the misuse of substances like rectified spirit and ENA in the production of illicit liquor. This can improve public health outcomes by reducing instances of alcohol poisoning and illicit liquor-related deaths.
• Policy Formulation: The judgment may prompt States to strengthen policies and enforcement mechanisms regarding alcohol regulation, ensuring that industrial alcohol is not diverted for unauthorized uses.

Way forward: 

• Strengthen Regulatory Framework: States should enhance monitoring and enforcement mechanisms to prevent the diversion of industrial alcohol for illicit uses, ensuring strict compliance with safety standards and public health protections.
• Collaborative Policy Development: The Centre and States should work together to harmonize regulations, balancing State autonomy with national interests, while focusing on safeguarding public health and optimizing revenue generation from alcohol-related activities.

Previous Year Question:

Q) It is a State where prohibition is in force. You are recently appointed as the Superintendent of Police of a district notorious for illicit distillation of liquor. The illicit liquor leads to many deaths, reported and unreported, and causes a major problem for the district authorities. The approach till now had been to view it as a law and order problem and tackle it accordingly. Raids, arrests, police cases, and criminal trials – all these had only limited impact. The problem remains as serious as ever. Your inspections show that the parts of the district where the distillation flourishes are economically, industrially, and educationally backward. Agriculture is badly affected by poor irrigation facilities. Frequent clashes among communities gave a boost to illicit distillation. No major initiatives had taken place in the past either from the government’s side or from social organizations to improve the lot of the people. Which new approach will you adopt to bring the problem under control? (UPSC CSE 2018)

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