Excise on liquor is one of the largest sources of Punjab's own revenue, running into thousands of crores a year, and the design of the excise policy is among the most consequential annual decisions the state government makes.
The system has run through various forms: auctioned vends, group licences, and a corporation model. Each change is contested and each is accompanied by allegations about who gets the licences.
Punjab has among the highest per capita liquor consumption in India and a serious alcohol problem alongside its opioid one, and the two are rarely discussed together.
Hooch tragedies, in which illicitly distilled liquor containing methanol kills people, occur periodically. In 2020 more than a hundred people died in Tarn Taran, Amritsar and Batala districts in one such episode.
A state that depends on liquor revenue to fund its budget is not well placed to reduce liquor consumption, and that conflict is permanent and unaddressed.
The duty is charged per bulk litre by strength and is collected before the bottle is sold, so the state is paid whether the stock moves or not. That is why the excise target is announced with the budget and why the policy is fought over in the weeks before the financial year turns.
Punjab, Haryana, Chandigarh and Himachal all set different rates within an hour's drive of one another, so a price gap opens along every district border and the traffic across it never stops. Moving legally made liquor between states is a larger trade than illicit distilling and gets a fraction of the attention.
Methanol is what kills and it gets into a batch because somebody used industrial spirit instead of drinking spirit. The distilling itself is not the danger. Each of these episodes is a supply failure in a trade that pricing has driven underground, and the inquiry after each one says so and changes nothing.