Impacts of the SC ruling on alcohol regulation

Source: The post impacts of the SC ruling on alcohol regulation has been created, based on the article “Beyond intoxication: On alcohol regulation, judicial verdict” published in “The Hindu” on 28th October 2024

UPSC Syllabus Topic: GS Paper 2- Governance- issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.

Context: The article discusses a Supreme Court ruling that allows States to regulate both potable and industrial alcohol, reinforcing federal principles. This limits Parliament’s control over “intoxicating liquors,” preserving State power in alcohol regulation. Justice Nagarathna dissented.

For detailed information on Supreme Court’s decision allowing Indian states to tax industrial alcohol read this article here

What did the Supreme Court rule regarding alcohol regulation?

1. The Supreme Court ruled that States can regulate both potable (drinkable) and industrial alcohol.
2. A nine-judge Bench clarified that Entry 8 in the State List includes all types of alcohol, including rectified spirit, extra neutral alcohol, and denatured alcohol.
3. This interpretation means States have control over the production, sale, and distribution of these alcohol types.

What are the impacts of this judgement?

1. Strengthening Federalism: By allowing States to regulate both potable and industrial alcohol, the ruling reinforces federalism, safeguarding State powers over alcohol regulation.
2. Limiting Central Control: Parliament lacks legislative competence over the entire industry of intoxicating liquor. This ruling restricts the Union’s reach, ensuring the States retain authority in alcohol matters.
3. Reaffirming State Authority on Economic Resources: Following a similar decision in July on mineral rights, the judgment preserves States’ legislative domain on local resources, protecting their autonomy in economically crucial sectors.
4. IDRA Exclusion: The Industries (Development and Regulation) Act (IDRA), 1951, listed “fermentation industries” for Union regulation, raising debate on State control over “industrial alcohol.” The Supreme Court’s judgment excludes intoxicating liquor, including industrial alcohol, from IDRA’s reach, clarifying that States retain regulatory power.

Question for practice:

Examine the impact of the Supreme Court’s ruling on state authority over the regulation of both potable and industrial alcohol.