Fumes of failure

Prohibition is damaging Bihar in multiple ways

The death of over 70 people after consuming illicit liquor in Bihar offers a tragic reminder of why prohibition is, ultimately, an unworkable policy both as a social-welfare objective and in terms of the stability of state finances. Imposed in 2016 as part of a key electoral plank by Chief Minister Nitish Kumar, the policy proved popular with women — understandably, since they bear the brunt of their menfolk’s alcoholic proclivities as victims of domestic violence and squandered incomes. But the solution, of banning the consumption, manufacture, and sale of alcohol, has repeatedly proven to be worse than the problem. The recent tragedy is, in fact, part of a series of hooch-related deaths with 30 incidents involving over 90 deaths recorded in November alone. Worse, the inevitable emergence of an illicit liquor mafia that smuggles liquor across state and international borders — a practice that flourishes in every state and Union Territory that has imposed prohibition — and deploys toxic chemicals to make hooch adds to the law and order problems in a state where the rule of law comes at a premium.
 

Plus, the revenue loss from prohibition can prove costly. In 2016, it was assumed that the state would forgo roughly Rs 4,000 crore in excise revenues from prohibition. In a recent letter to Mr Kumar, the Confederation of Indian Alcoholic Beverage Companies (CIABC) said the state lost about Rs 10,000 crore in revenues from prohibition annually. Given the development needs of the state, additional revenue could have been useful. Haryana’s experience with prohibition in 1996 offers a cautionary tale. Imposed by Bansi Lal’s Haryana Vikas Party (HVP), the policy cost the state revenues and jobs even as incidents of liquor deaths burgeoned. To compensate for the revenue forgone from liquor sales, the Haryana government raised tariffs on state-provided services — from bus fares to power and petrol. Not surprisingly, this policy cost the HVP seats in subsequent elections, encouraging the party to lift the ban in 1998.

It is nobody’s case that alcohol consumption should be encouraged, certainly not in a country where social-drinking norms are near non-existent and daily life is tough enough to encourage alcoholic oblivion among working men. It is also unfair to expect womenfolk to quiescently suffer the consequences, which explains why they have been at the forefront of prohibition movements in states throughout India. But the CIABC’s solution of employing women in alcohol-manufacturing units cannot be considered optimal, given conservative social norms. In the last century, the mining industry in the United Kingdom found a solution by handing over weekly wages to the womenfolk instead. This is a solution that Indian policymakers hit upon some years ago by mandating that subsidies be deposited in the accounts of women in a household. Manufacturing and mining units in Bihar could profitably emulate this practice. As being suggested by several stakeholders that prohibition has run its course in the state, Mr Kumar could move towards experimenting with alternative wage payment practices and gradually lifting prohibition. At a time when the state urgently needs more public investment, this may be an opportune moment to take one step back.