Dry Days, All Year: Is Prohibition the Wisest Law to Implement?

In January 1920, the United States of America instituted and effected in force the Volstead Act, prohibiting the sale of “intoxicating liquors”. For the next thirteen years America would say goodbye to ‘having a drink’, witnessing the rise of legendary gangsters like Al Capone, the flourishing of the illegal liquor trade with several illegal dens, speakeasies proliferating, leading to the Depression and the final revoking of the Volstead act, with President Franklin D Roosevelt noting “I think we could all do with a beer.” It was more than evident that the 13 long years of prohibition did nothing more than giving rise to a mafia and encourage illegal selling and trade of alcohol.The prohibition debate in india has been brought under the spotlight again, with the Nitish Kumar government introducing even more stringent prohibition laws, just after the Patna High Court termed the existing Prohibition act in the state to be “illegal’. The government has decided to move the Supreme Court, challenging the HC ruling. Given that about 30% of Indians consume alcohol, and about 11% are moderate to heavy drinkers, we thought of laying bare for you how effective prohibition proves to be in terms of checking alcohol-related tragedies and mishaps.The Long and Short of Prohibition in IndiaCurrently, manufacture and sale of liquor is prohibited in the Indian states of Gujarat, Kerala, Nagaland, Bihar and the union territory of Lakshwadeep. The State of Bombay under the British had prohibition between 1948 and 1950, and again from 1958. Today, Gujarat has a sumptuary law in force that deems the manufacture, storage, sale and consumption of alcoholic beverages.The legislation has been in force since 1 May 1960 when Bombay State was bifurcated into the states of Maharashtra and Gujarat. The Bombay Prohibition Act, 1949 is still in force in both states, however the licensing regime in Maharashtra is quite liberal with granting licenses to vendors and traders. Gujarat is the only Indian state with a death penalty for the manufacture and sale of homemade liquor that results in fatalities. The legislation is titled the Bombay Prohibition (Gujarat Amendment) Bill, 2009.But over the years, the illegal liquor trade has gained a lot of notoriety in Gujarat, with alcohol easily available right at your doorsteps. Involving bootleggers, locally referred to as ‘holders’, one can easily get alcohol delivered to their homes. Most of the liquor is smuggled in from neighbouring Daman, an union territory where prices are cheap. Northeastern states have long contemplated the revoking of prohibition, with Mizoram doing so in 2015. Nagaland is also planning to do away with its prohibition law.Checking Hooch Related TragediesIn 2015, according to Factly, Indians consumed almost 20 billion litres of alcohol, amounting to a staggering Rs 1.5 lakh crore. This figure is only projected to grow exponentially in the coming years. We, as a country, have been plagued by several instances of people loosing their lives and eyesights after consuming hooch, or spurious liquor. Country liquor laced with methyl alcohol is the main cause behind such tragedies.But prohibition has hardly ever proved effective in reducing such cases. In fact, prohibition has always resulted in the proliferation of manufacturing and consumption of spurious liquor. In fact, in August 2016, at least 13 people died after consuming spurious liquor in the Gopalgunj district of Bihar, where stringent prohibition is in place, even though the district administration maintained that the deaths were not related to drinking of alcohol.State Governments are primarily responsible for controlling the sale of spurious liquor. According to IndiaSpend, with the increase in the sale of licensed liquor, sale of spurious liquor is also thriving. As per records available with the Ministry of Home Affairs, more than 3000 incidents of consumption of spurious liquor took place in the country resulting in the loss of 2927 lives. The number of such incidents in 2012 was 725. While the number of incidents came down to 520 in 2013, they went up exponentially to 1797 in 2014, an increase of more than 250%. These cases resulted in 731 deaths in 2012, 497 deaths in 2013 and 1699 deaths in 2014.Factly reports that Maharashtra accounts for the most number of deaths in these three years with 401 followed by Karnataka with 395 deaths. Uttar Pradesh with 271, Andhra Pradesh (including Telangana) with 253 and Madhya Pradesh with 229 make up the top five. The state of Gujarat where there is official prohibition in place had 177 deaths during this period. These 8 states make up for 70% of all the deaths. All these states make substantial tax revenue through manufacture & sale of liquor. The only notable exception to this list is Tamil Nadu where not a single case has been registered in the last 3 years. In Tamil Nadu, the government manages the retail shops as well.Loss in RevenueAccording to Jose Sebastian, associate professor at Gulati Institute of Finance and Taxation, Thiruvananthapuram, “Liquor provides 20 per cent of the share of the government’s own revenue in most States.” In 2013,excise revenue in Karnataka was 20 per cent of State revenue. In West Bengal, revenue went up to Rs 2,600 crore, from the previous year’s Rs 2,100 crore. In FY 2012, out of Tasmac’s Rs 24,500-crore sales , over Rs. 21,800 crore went to the exchequer. In the case of the Kerala State Beverages Corporation or Bevco, Rs 7,241 crore of its Rs. 8,818 crore turnover was claimed by the government.It is evident that states will lose out heavily on revenue if an alcohol is being introduced. Moreover, proper policing measures, which check the sale and manufacture of spurious liquor is what should be done instead of prohibition.Since India’s economic liberalisation, the market for IMFL and imported liquors is growing fast. A study conducted by the Associated Chambers of Commerce and Industry in India in 2011 found that the liquor industry was expanding 30 per cent year-on-year. Now with statistics which point towards high levels of consumption, and the generation of revenue in states through excise duties, it becomes rather rhetorical to ask if one needs prohibition.

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Dry Days, All Year: Is Prohibition the Wisest Law to Implement?

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Topics: Alcohol Liqour Prohibition Bihar Liquor Ban