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States to control manufacturing of potable alcohol

The Union Cabinet on Wednesday approved transferring the authority to regulate 'potable alcohol' to states.



New Delhi: The Union Cabinet on Wednesday approved transferring the authority to regulate 'potable alcohol' to states.

"Cabinet, chaired by Prime Minister Narendra Modi, has given its approval to amendment in the First Schedule of Industries (Development and Regulation) Act, 1951 to transfer the authority to regulate 'potable alcohol' to states as recommended by the Law Commission in its 158th Report," an official statement said today.

Following this, the existing heading '26 Fermentation Industries' in the First Schedule of Industries (Development and Regulation) Act, 1951 shall be substituted with the heading '26 Fermentation Industries (other than potable alcohol)' and a Bill to this effect will be introduced in Parliament, it added.

This amendment clears a long standing confusion about the jurisdiction of the Centre and states on potable and industrial alcohol, the statement said.

"It will ensure that industries engaged in manufacturing alcohol meant for potable purposes shall be under the total and exclusive control of states in all respects. This should also assign accountability to states for manufacture of potable alcohol," it added.

The Amendment was necessitated following the Supreme Court judgement in 1997 in the case of Bihar Distillery Vs Union of India.

The apex court had ordered that industries engaged in manufacturing alcohol meant for potable purpose shall be under the control of the state and controls concerning Industrial Alcohol shall be under the jurisdiction of central government, it said.

Subsequently, the Law Commission in its 158th report, having taken suo-moto cognisance of the emerging practical problem as a sequel to the decision of the Supreme Court in interpreting the constitutional provisions.

It recommended to substitute item 26 of the First Schedule of Industries (Development and Regulation) Act, 1951 as Fermentation Industries (not including alcohol).

However, keeping in view the present status of licensing requirement and the judgement delivered by the Supreme Court, the Department of Industrial Policy and Promotion, after consultations with concerned Ministries/Departments, has amended entry 26 of the first schedule of I(D&R) Act, 1951. 

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