I was born in a Bihar that had prohibition in place. It was under the regime of Karpoori Thakur, political guru of Lalu Prasad and Nitish Kumar, that the state went for total prohibition. From what I remember of that period now, the situation then was not very different from what I read about the United States of the 1920s.
The US experimented with the liquor ban way back in January 1920. It soon found out that more people were drinking alcohol than before. The country suffered revenue loss and the cost of enforcing ban too was quite high. There was a well-developed black market of liquor and the number of people indulging in “illegal trade” just skyrocketed. And contrary to expectations, other business activities too took a hit. According to Encyclopaedia Britannica entry, “the Prohibition era also is remembered as a period of gangsterism, characterized by competition and violent turf battles between criminal gangs.” The era continued till 1933.
The situation in Bihar of the 70s was no different. I still remember many of my acquaintances just crossing over the border to enter Nepal to have liquor-filled evenings on the other side. They would come back drunk with a few extra bottles to be consumed in the days ahead. I am sure they would have bribed officials at check posts. I cannot recall the spread of gangsterism though.
The state lost precious revenue. People consumed liquor whenever they wanted. There were no efforts to stop illegal trade and the state would have spent a fortune trying to stop what was unstoppable.
But politicians are not known to check the pages of history when announcing something that seems popular on the face of it. Bihar chief minister Nitish Kumar did precisely that. In response to a demand from a Women’s group in Patna before elections, he committed himself to total prohibition if re-elected, without realising what he was agreeing to.
Now he has followed up on the pre-election promise. What will the state lose if the ban is implemented? At least 15 per cent of the total taxes the state collects. That is direct loss of tax revenue of nearly Rs 4,000 crore every year. The indirect losses are going to be even bigger.
Hotels and restaurants, one of the fastest growing sectors for quite a while in the state, will close down. At least some of them will. Tourist arrivals will be reduced to a trickle. Business eco-system will suffer.
And the most damaging will be the impact on overall business sentiment. After years of persuasion, the state managed few hundred crores of investment, some from the distilleries. The prohibition decision comes at a time when some of them were planning for major expansion.
What will the state achieve by this decision which is next to impossible to implement? Bihar has nearly 700 kilometre long porous border with Nepal. What it means is that for any Bihari, liquor will be freely available on the other side. If helping the sagging sales in beleaguered Nepal is the intention, then it sounds perfectly logical.
Granted, that there is a social cost to spread of alcoholism. Domestic discord, drunken driving resulting in accidents, drug abuse, spending on non-priority items at the expense of more urgent needs — these are some of the consequences of alcoholism. But they will exist despite prohibition as there is no way black market of liquor can be fully rooted out. We have seen it in places where prohibition exists for years. Why ban it then? Why not raise taxes to make alcohol unaffordable?
