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The Big Picture – Bihar to ban alcohol from April 1, 2016: Has prohibition worked anywhere?

The Big Picture – Bihar to ban alcohol from April 1, 2016: Has prohibition worked anywhere?

Summary

Chief Minister Nitish Kumar has banned the sale of alcohol in Bihar. The complete prohibition is a very sensitive and complex issue. It has never succeeded anywhere in the world. Even a liberal country like America had imposed ban on alcohol sale in the early 20th century. After it led to the rise of mafia and bootlegging across America, the US government was forced to reverse the ban. Total ban on alcohol was Nitish Kumar’s election promise. The promise to ban alcohol was made to woo women voters who have been at the forefront of protests against rising liquor consumption in rural areas of the state.

Total prohibition has not worked well anywhere. The Indian experience is that it leads to the creation of a black market and a rise in the consumption of spurious liquor, leading to hooch tragedies, crime syndicates that patronise bootlegging and rent-seeking by the authorities. The sharp decline in excise revenue also ruins state finances and affects welfare programmes. All independent studies have proved that liquor ban or prohibition is not economically feasible anywhere in the World. Liquor is also a major source of income for many states. Liquor ban also affects the booming tourism industry across India.

Alcohol has been traditionally frowned upon in India for religious and cultural reasons, but a growing middle class has made the country a booming market for drinks makers, and only a handful of districts and states have an outright ban, including Gujarat. The prohibition has been in force in Gujarat for over 50 years. It does not mean that Gujarat is really a ‘dry’ state. The liquor shops on Gujarat border have been doing a great business for a long time. The black marketing of liquor is also rampant in the state. The southern state of Kerala is also introducing limits on alcohol sales.

The ban is backed by valid social and economic reasons. Alcoholism among men, especially in the economically vulnerable sections, wreaks havoc in families. Women have to face physical violence and must protect their families against economic ruin. But there is not sufficient evidence that a liquor ban could be an effective remedy against economic impoverishment or social violence caused by alcoholism. Prohibition only pushes the sale of liquor underground, causing a rise in prices and the spread of adulterated liquor. States like Andhra Pradesh and Tamil Nadu tried prohibition in the 1980s and ’90s, but withdrew the policy after a few years, admitting to its futility. Mizoram, which had enforced a liquor ban for 17 years, called it off recently for the same reason. Alcoholism, no doubt, is a pressing social and public health issue. But the way to combat it is through outreach programmes and de-addiction centres. The government may also resort to progressive policies to empower women. The reservation of seats in panchayati raj institutions, incentives for the education of girls and distribution of bicycles are concrete steps that would give a voice to women. Political empowerment and economic independence would provide women the agency to rein in their menfolk.

Alcohol is a state-subject and each state government has the right to decide whether they want to ban it or not. Prohibition makes even less sense for a funds-starved state like Bihar that has been promised health, wealth and wisdom. While the ban would receive cheers from the women voters of Bihar, the state’s exchequer will take an annual hit of Rs.5,000 crore. Further, the state administration will have to face the challenge of implementing the ban, especially in containing growth in sales of spurious liquor.