Prohibition in Bihar is making the state lose excise revenues while spending heavily on the liquor ban’s implementation
As multiple hooch tragedies, resulting in scores of deaths, struck Bihar, the state’s prohibition policy came under increasing attack. The state’s former Chief Minister, Lalu Prasad Yadav, was among the most vocal critics. He remarked that he had warned the sitting Chief Minister that he would lose revenue while smugglers would have a field day. The former Chief Justice of India added his strong censure. On 26 December 2021, from a public platform, he berated Bihar’s experiment in prohibition. He dubbed the state’s prohibition law as smacking of a lack of foresight in drafting legislation, the consequence of which was the inundation of courts with liquor-related cases. His annoyance was mainly because of the crippling overburdening of the state’s judicial administration, with lakhs of prohibition cases and bail applications clogging the Patna High Court and the lower courts. The frustration of the judiciary was writ large in a recent judgment (October 2022) of the Patna High Court. The judge pronounced that the Bihar government had failed to implement prohibition. The state had witnessed many hooch tragedies putting public life at significant risk. This has led to adverse consequences, such as a rise in crimes that included bootlegging by juveniles, villagers, politicians, and cops. The judge further observed that liquor is freely available in the state, that minors were transporting liquor, and that drug consumption had increased post-liquor ban. He found fewer cases registered against lynchpins of liquor cartels than poor people caught drinking. Investigating officers deliberately avoided corroborating allegations with evidence, allowing the mafia a free run. Bihar, already figuring among the fiscally most vulnerable states in the country, chose to forego a large chunk of revenue by imposing prohibition. While no positive consequence has flowed out of prohibition, the policy played its part in further driving the state into penury. For 2015-16, state excise money was estimated at INR 4,000 crores. Over the last seven years since prohibition was imposed, given the usual increment in excise earnings, the state has lost around INR 40,000 crores.
Prohibition laws were made draconian to deal with the issue of alcoholism. Some of the law’s worst features are holding the entire family liable to imprisonment if any family member violated the liquor ban, and imposing a collective fine on a whole village if there was any violation of the prohibition.
It is incumbent on any state that first embarks on the road to prohibition to study what happened to other countries and states that ventured down that path. In the United States, for instance, after the prohibition imposition in 1920, authorities reported increased consumption of adulterated alcohol. There was a sharp spurt in crime that became organised. The court and prison systems were unbearably strained. Large numbers of people were jailed, and prison expenditure went through the roof. In 1929, the Assistant Attorney General declared that alcohol was available everywhere at almost any hour of the day or night. The ban sounded the death knell of the brewing industry and resulted in substantial job losses. While the country lost US $11 billion in tax revenues, it spent an additional US $300 million on enforcement. The Commission on Law Observance and Enforcement report in 1931 pointed to widespread police and political corruption. Ultimately, prohibition was abandoned in December 1933. In India, Haryana gave up its attempts at prohibition due to its inability to control illicit distillation and bootlegging. Tamil Nadu and Kerala similarly ventured to ban liquor but abandoned it as they failed at implementation. Similarly, Meghalaya, Mizoram, Nagaland, and Manipur overturned prohibition after they failed in execution. Even the state of Gujarat's prohibition may be a charade, given the supply of liquor from neighbouring Daman, aided by a porous border and administrative complicity. The most recent experiment was in Maharashtra. The state-imposed prohibition in 2015 in the district of Chandrapur and withdrew it in 2021. Based on official statistics gathered by government departments, the collector's report documented the results, which appear to be a replica of the happenings in Bihar. The report declared prohibition in Chandrapur a substantial failure. It noted that the sale of liquor had gone up, and large quantities of illicit and spurious liquor had started circulating via a thriving black market. The state government had lost revenue despite the liquor trade increasing in the district, as revenue from liquor was driven into the black market and private hands. There was an adverse impact on the district's social, health, and economic parameters in the five years of prohibition. There was a marked increase in the registration of criminal cases and arrests related to prohibition. Especially worrying was the growing involvement of women and children in the illicit liquor trade.
The frustration of the judiciary was writ large in a recent judgment (October 2022) of the Patna High Court.
These examples establish that prohibition has little chance of success. Those habituated to drinking were willing to take huge risks. The lure of easy and good money has all the attractions to allow a thriving partnership to grow where the underground liquor mafia and law-enforcing agencies join hands to share the booty. It puts enormous powers in the hands of the administration to trouble and arm-twist citizens. Additionally, the state loses substantial revenue while it spends more on enforcement without getting the expected results. Therefore, apart from the moral satisfaction of legally cleansing society of what is perceived as a social evil, there is nothing the state gets to show as an accomplishment. It is now universally agreed that women-led community-based approaches are likely to yield better results than a ban. The sooner Bihar realises this, the better it will be for the state and its people.
The Commission on Law Observance and Enforcement report in 1931 pointed to widespread police and political corruption. Ultimately, prohibition was abandoned in December 1933.
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Dr. Ramanath Jha is Distinguished Fellow at Observer Research Foundation, Mumbai. He works on urbanisation — urban sustainability, urban governance and urban planning. Dr. Jha belongs ...Read More +