The Hindu Business Line : Are soft drinks a mass consumption or luxury product?

According to the soft drinks industry, 90 per cent of consumption is by the middle and lower income groups and this is the basis of the industry's plea to the Finance Ministry for a rationalisation of excise duty.

Apparently, the aerated soft drinks industry in India is at a nascent stage with a per capita consumption of less than eight bottles, the Federation of Indian Chambers of Commerce and Industry (FICCI) said in its pre-budget memorandum. This stands lower than that in the neighbouring countries such as Pakistan, Sri Lanka, Thailand, Indonesia and the Philippines.

The industry has sought a rationalisation of excise duty to enable it to exploit its potential. Its main grouse is that the Budget promise made four years ago on doing away with special excise duty (SED) on all mass-consumption items was implemented, with the exclusion of aerated soft drinks.

It points out that when cosmetics, refrigerators and videocassettes were granted waiver of SED, aerated beverages, which accounted for 90 per cent consumption by the middle and lower income segments, were not shown the same favour.

To validate its observations, the industry points out that aerated beverage was capital and employment-intensive and supported various ancillary offshoots such as manufacturing and service units - PET bottles, crates and visi- coolers, retail, etc. Elaborating further, the industry says that that extra production of every one million cases generates additional employment for 1,300 people in the economy. Against this background it has sought removal of SED. The industry currently employs directly or indirectly 1.5 lakh people, it claims.

Further, it points out high excise duty results in massive production of spurious products and pass-offs manufactured in unlicensed facilities and inflicts loss of revenue to the exchequer.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
Jaquar orientation centre

Chemical cos seek easier funds, laws

Khare takes oath as Chief Justice

Bar Council against entry of foreign lawyers

IA casual labourers lose case — Regularisation claim not tenable, says court

Plan strategy for grassroots action

Flak for slack adjudication — CBEC told to expedite recovery

DGFT enters digital era

Expert groups set up on Delhi master plan

State PSUs pose a challenge: SCOPE

Central India Pipeline project being reworked