Tax and Tonic: India’s Rational Pivot on Prohibition

Alcohol occupies a curious place in India—officially discouraged by constitutional ideals, yet quietly relied upon as one of the most dependable sources of government revenue. As states grapple with shrinking fiscal autonomy, the tension between moral principle and economic necessity has become increasingly difficult to ignore. In this episode, we explore the politics of alcohol taxation, tracing how one Indian state is challenging decades of inconsistent policy with a new approach based on the actual alcohol content of each drink rather than its brand or category. We examine why liquor has become so financially important to state governments, and how efforts to create a more rational tax system could reshape public policy across the country. The story reveals a deeper conflict between ethics and economics, where the regulation of a single product exposes the difficult compromises at the heart of modern governance.https://www.economist.com/asia/2026/06/07/money-troubles-are-driving-indias-states-to-drink