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In those dark and airless caverns with neon ‘BAR’ signs that dot Kerala’s landscape, visitors (mostly men) are known to enjoy songs and jokes as much as their drinks. The Kerala government’s new liquor policy and, the manner in which chief minister Oommen Chandy pulled it out of a file, nah, his pocket, no a hat, oh no, out of a kuppi (bottle), has all the makings of a tippler’s joke. But the jokes (and there are already a few out) have an edge to them. For, unless Chandy pulls out a few more tricks from his bag, this ill-conceived speed diet of ‘bar prohibition’ without a proper back-up plan in place is going to hit Kerala’s economy hard.
In a country where the health of most state government kitties depend, to a large extent, on how much alcohol its denizens consume, cash-strapped Kerala’s decision to totally forgo the current Rs 9,600 crore annual revenue in 10 years through a liquor prohibition policy sounds like a brave decision. Is it a risky but wise move? Well, despite repeated attempts, in India prohibition has never worked. So there’s little reason why it should work in Kerala—ruled now by a Congress-led coalition. It has experimented with bans in the past, with disastrous results, but is still willing to have another go at it. And the Kerala decision has brought copycat calls from many states, most vocally from Tamil Nadu where MDMK’s Vaiko is a big votary of a liquor ban. And of course, we now have a prime minister from Gujarat, a state that has been ‘dry’ since Independence.
So does this mean prohibition is acquiring more political currency across the country? Very, very unlikely, say experts, citing the biggest deal-breaker—the huge revenues generated by the liquor trade. The total value of spirits, wine and beer consumed in India is projected to be in the neighbourhood of Rs 1.5 lakh crore in 2015, according to an Assocham report.
Tax revenue from alcohol is among the top revenue-earners for most states. There is in fact more effort on the part of state governments like Tamil Nadu, Delhi and, till recently, Kerala to push sales and garner more revenue through higher excise duty. Tamil Nadu is reportedly on the verge of raising excise duty by another 15-25 percent. All told, alcohol is a significant revenue generator for some states as the manufacture of liquor is subject to state excise duty and its sale is subject to VAT; state excise duty on alcohol and intoxicants alone contributed over 15 per cent of state tax revenue in 13 out of the 30 states/UTs in 2012-13.
At the Centre, neither the BJP nor the Congress have been vocal on the issue of liquor prohibition (which is a state subject). Even in Kerala, there are dissenting voices to the government decision. Other than Gujarat, no other BJP-ruled state has imposed a ban on liquor. Dr Manmohan Vaidya of the RSS says, “Government prohibition alone will not help. Society too should create its own system to control levels of consumption as alcoholism has destroyed many a family.”
As a policy, the ban on liquor sales in states like Gujarat, Mizoram, Manipur and Nagaland, and similar experiments for short spell in states like Haryana, Andhra Pradesh, among others, has proved that prohibition doesn’t really work. Nagaland is a prime example, it was the first among the Northeast states to impose a ban on manufacture and sale of liquor in 1989. Yet today, booze is freely available in the state. Supplies flow in from other states with prices fluctuating according to demand. Lack of job opportunities in the region has also seen a rise in the number of young people engaged in supplying illicit liquor on the side to earn a quick buck.
What is of serious concern is that in the absence of liquor, many young people get into drugs, which though banned, is available but does not manifest itself visibly. “When you ban something, it is not in the nature of human beings to be bound by it. Instead, liquor sales could be restricted and there should be parallel efforts to engage the youth and provide counselling,” says Monisha Behal of NGO North East Network.
Everyone knows lobbies in the state Congress are at play; PCC chief Sudheeran, CM Chandy are trying to KO each other.
Indeed, drugs and alcohol abuse seem to exist in complementary paths in India. As if to highlight this, Dr Manmohan Sharma of the Voluntary Health Association of India points to the crackdown in Punjab on the sale and consumption of drugs (which has reached epidemic proportions in the state) post the general elections. The offshoot has been an increase in alcohol consumption among youth, says Sharma, pointing to several reports. “Unfortunately, while there is a crackdown on narcotic drugs, there are no similar restrictions on alcohol, leading to a spurt in sale of liquor,” he says. “Unless you have a prevention and rehabilitation policy, mere prohibition is not going to work.”
One also has to look at whether the issue is just of pure politics or genuine concern for people’s welfare. It’s true that alcohol consumption in Kerala, particularly among the young, has seen a steep upward trend in recent years—per capita consumption of liquor is double the national average. That said, is an ill- thought-out prohibition policy the solution? Everyone knows lobbies in the state Congress are at play here. Kerala PCC president V.M. Sudheeran, backed by the church, initially took all the credit for the decision as if he had single-handedly put in place a partial prohibition act. Having only just managed to escape the dubious prospect of being linked to ‘solar scamster’ Sarita S. Nair, CM Oommen Chandy could ill-afford to be seen as a spokesperson for the liquor lobby. So he upped the ante, talked of not just cancelling bar licences but also making Kerala an “alcohol-free” state in 10 years.
That said, first reactions are that Chandy, to collect short-term hurrahs, has put the doddering state’s finances, on the brink. Nearly 15 per cent of Kerala’s total revenues come from liquor sales and bar licences. The vagueness surrounding the new policy hasn’t helped either: the government has permitted five-star hotels and social clubs to continue to sell liquor. The state has also not taken any decision on the wine and beer parlours, nor does it have guidelines for the liquor that servicemen are entitled to. However, the government has said that every year, a further 10 per cent of the Kerala State Beverage Corporation (Bevco) outlets will be closed. Meanwhile, the serpentine queues at the outlets will grow longer and longer.
Already, the ramifications of a ‘prohibition’ state are being felt in the tourism industry: one of Kerala’s lifelines. As the state gears up for the peak tourist season (September-February), there are media reports of tour cancellations because of the “prohibition in Kerala”. Authorities also fear an invasion of illicit liquor into the state. Sources in the excise department say they are stretched as it is, with only 5,000 personnel in the ranks. Kerala, which has a history of liquor tragedies because of illicit hooch, will have to be braced for that too.
A 2005 WHO study found that while prohibition “appears to have little effect on alcohol use by men, it may reduce the proportion of women who consume alcohol”. The study, by S.V. Subramanian, pointed out that lobbying by women’s groups is important in influencing local policies. Such ‘anti-alcohol movements’ initiated by women is particularly strong in rural India. Several villages of Saharanpur district in Uttar Pradesh are witness to this. For over two decades, womenfolk in large number have been fighting to get liquor outlets removed from their villages. “In the first instance, in 1993 our women staged a protest for 100 days before the liquor shop in Patedgaon was shifted,” says K.N. Tiwari of the NGO Disha. Since then women in several villages here have managed to get licences of liquor shops in their areas cancelled.
It hasn’t always gone their way though. Tiwari points to a disturbing trend of menfolk in some villages having taken to bringing liquor from neighbouring areas and supplying it from their homes with the help of their wives. Just recently there was a clash in Ahari Abdullahpur village of Sarsawa block with two women being arrested.
Hemant Mundkur of Tulleeho Wine Academy, predictably, is an anti-prohibition advocate. And he has the facts to back it. “The American prohibition from 1920 till 1933 resulted in many criminal enterprises establishing themselves. Led by the Italian mafias, bootlegging and illegal manufacturing and sale of alcoholic beverages thrived. Closer home, ‘dry’ Gujarat gets regular supplies from neighbouring states.”
Kerala’s excise department is stretched, with just 5,000 staff. And with the state’s history of illicit hooch tragedies....
Here’s another more telling example: in 1994, the TDP’s N.T. Rama Rao won the Andhra Pradesh elections primarily on this promise and promptly imposed prohibition. When Chandrababu Naidu overthrew father-in-law NTR in a bloodless coup in 1995, the state economy was in the doldrums. There was an annual loss of Rs 1,200 crore. The ‘dry law’ had put off corporates and applied the brakes on Hyderabad’s growth as a metro. The smuggling of illicit, cheap liquor boomed from nearby states. Soon the law was diluted. People with ‘medical reasons’ were allowed to drink at 5-star hotels. By then, it had become regular practice for people to make frequent trips to Gulbarga and Bidar in bordering Karnataka to drink. Many said that prohibition had created more alcoholics than before. The strict policing required to monitor prohibition had become a huge drain on the state’s resources. Finally, on April 1, 1997, the Chandrababu Naidu lifted prohibition and began chasing his IT dream.
Already, there is much anticipation in Karnataka and Tamil Nadu which see a good opportunity and higher revenues through cross-border sales in Kerala. Prohibition or not, the kallu (toddy) shops in Kerala are set to grow with no ban on their operations. As they say, the more things change....
By Lola Nayar with Minu Ittyipe in Kochi with Madhavi Tata in Hyderabad