The Kerala government is on the defensive over its decisions to grant liquor tax exemptions and pursue rare-earth mining plans. The previous CPM-led government had promoted low-alcohol liquor and wine made from local fruits, but now it is accusing the Congress of allowing tax reliefs.
Background of the Controversy
According to a report by Arjun Raghunath on June 21, 2026, the CPM government had earlier decided to encourage the production and sale of low-alcohol beverages, including wine from locally grown fruits, as part of a policy to reduce alcohol consumption. However, the current government is facing backlash for providing tax exemptions on these products.
Political Blame Game
The CPM has criticized the Congress for allegedly facilitating these tax reliefs, while the Congress has defended its stance, stating that the exemptions were necessary to support local farmers and industries. The debate has intensified as the government also pushes forward with rare-earth mining projects, which have raised environmental concerns.
"The Congress is responsible for allowing these tax exemptions, which go against our earlier policy of promoting responsible drinking," said a CPM spokesperson. The Congress countered, saying, "The tax reliefs were aimed at boosting the local economy and supporting fruit growers."
Impact on State Revenue and Environment
The liquor tax exemption is expected to reduce state revenue by an estimated ₹50 crore annually, according to government sources. Meanwhile, the rare-earth mining plans have drawn criticism from environmental groups, who warn of potential ecological damage in the mining areas.
Chief Minister Pinarayi Vijayan defended the mining projects, stating that they are essential for technological development and job creation. "We are committed to sustainable mining practices that minimize environmental impact," he said.
The opposition has demanded a white paper on both issues, accusing the government of lacking transparency. The debate is likely to continue as the state prepares for upcoming local elections.
