India’s unemployment rate is currently at 9.2 percent – among the highest in the world. The biggest challenge before the country is to provide employment to its young population. According to the data from the Ministry of Labour, one million people join India’s labour force every month.
With increased automation and use of technology in manufacturing, job growth in the manufacturing sector has gone down. In such a scenario, the restaurant and bar industry is a big source of employment for India’s young population. This is a labour intensive sector where the use of human beings cannot be easily replaced by technology or robots.
Delhi Government’s Bizarre Diktat
Lately some state governments have been trying to curb this industry in the name of controlling (or prohibiting) alcohol consumption. A major problem in India is that many who are employed are in low-paying jobs. Bars provide well-paying jobs because those waiting on tables in these bars get good income from the tips given by customers. So controlling the number of bars is equivalent to limiting well-paying jobs for the poor.
The state government of Delhi has stopped giving new licenses to bars. The reason being given is that there are enough bars and alcohol shops to meet the existing demand. However, there is no way the government can assess the demand for alcohol. This baseless justification implies that the Delhi government will give new licenses only when there is a shortage of alcohol. But demand and supply assessments should be left to market forces. If the supply of alcohol is more than its demand in Delhi, then some bars and liquor shops will be automatically shut down.
The decision of Delhi government to not issue any new licenses for bars and alcohol shops also benefits those bars and liquor shops that already have a license. The decision reeks of bias towards existing players. It serves to reduce competition in the market and hurts consumers. A newly opened bar in a posh market of Delhi, with millions in investment, lies idle because the Delhi government has refused to give it license to serve alcohol. The newly hired employees have been laid off until the place manages to get a license.
Also Read: No New Liquor Shops to Open in Delhi, Malls the Only Exception
Unemployment Will Lead to Increase in Crime
The Delhi government said that it has decided to not issue new licenses this year because many resident welfare associations in the city have complained that liquor shops in their neighborhoods create law and order problems. But there appears to be no evidence for this assertion. Some of the localities with the highest densities of liquor shops or bars (Khan Market, Defence Colony, etc) are among the most peaceful neighbourhoods of the city.
What creates the real law and order problem is when people are left unemployed. Unemployed people tend to resort to crimes like kidnapping, stealing etc. Crime went down in many parts of India as more jobs were created after the economic liberalisation of 1991. Middle class people also do not want the poor to live near their homes. The simple fact of a few resident welfare associations demanding something cannot be a sufficient reason to fulfil that demand.
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Snatching the Right to Livelihood
Politicians take the excuse of directive principles of state policy given in the Constitution when they want to impose prohibition. The Constitution clearly states that directive principles of state policy do not have to be mandatorily followed. The Constitution-makers were of the view that the Constitution needs to be amended with changing times and realities. That is why they gave us the provision of constitutional amendments. If they had intended for the Constitution to be written in stone and never changed, such a provision wouldn’t exist.
The decision of the Bihar government to prohibit alcohol has left thousands who worked in liquor shops or bars unemployed. Right to livelihood is part of right to life, which is enshrined in the Constitution The governments of Bihar, Delhi, etc are violating a fundamental right in the name of upholding a directive principle of state policy. Recently, one of the grounds on which the Supreme Court turned down the dance bar ban in Mumbai is that it violates the right to livelihood of dancers in these bars. There appears to be a trend of politicians in India seeking to rob people of their right to livelihood.
Also Read: 270 Days After Bihar’s Liquor Ban, Major Crimes Up by 13%
Tourism Industry to Take a Hit
Tourism is an industry that generates maximum amount of employment. Limiting bars or prohibiting the consumption of alcohol has a very negative effect on tourism where it is implemented. India should learn from Thailand. By giving a boost to tourism through liberal social policies, Thailand has managed to bring down its unemployment to less than 0.5 percent – among the lowest in the world.
World over, economists are of the view that prohibiting intoxicants and narcotic substances leads to mafia and criminal gangs controlling the prohibited business. That is why the movement for legalising narcotic substances is gaining ground globally. By prohibiting or curbing alcohol consumption, political governments in India are paving the way for increased criminalisation and genuine, society-wide law and order problems in the future.
(The author is an economist based in New Delhi. This is a personal blog and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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