NCAER calls for lifting Bihar’s liquor ban, saying it has not reduced crimes against women.
The ban has led to revenue losses, higher enforcement costs and concerns over illicit liquor and drugs.
The paper lists six development priorities, including education, health, governance and women’s empowerment.
Bihar should revoke the ban on alcohol as it failed to prevent violence against women from rising, and anecdotal evidence suggests that legal drinking was substituted by an increase in the consumption of illicit drugs and alcohol, a research paper by economic think tank National Council of Applied Economic Research (NCAER) has said.
The paper, titled 'Macro Perspective of Bihar's Development Achievements, Unfinished Agenda, and the Way Forward', further said that the reinstatement of the liquor excise tax to the pre-ban levels would increase the state's own revenues by 14-15 per cent and decrease spending on enforcement and anti-smuggling operations.
The paper, prepared by a team of economists led by Ratna Sahay and presented at the 'India Policy Forum', noted that the primary motivations for introducing the ban in April 2016 were the belief that alcohol consumption was a significant contributor to domestic violence and that household resources could be better spent on more productive activities.
It added that women's groups and activists strongly supported the prohibition, arguing that it would lead to a decrease in alcohol-related abuse.
"We now have sufficient data and information to assess if the ban was effective. Reported crimes against women in Bihar have not declined following the introduction of prohibition. Instead, total reported crimes against women increased over the post-2016 period," it said.
According to the paper, overall, the available evidence does not indicate a broad-based reduction in crimes against women following prohibition.
At the same time, it pointed out that the prohibition regime has been accompanied by concerns regarding the expansion of the illicit liquor trade, increased enforcement challenges and corruption, and the growing use of alternative intoxicants, including illicit drugs.
"In tandem, there was a significant rise in illegal liquor trade leading to higher alcohol consumption, increased crime and corruption, and an increase in the use of alternative additive substances, such as illicit drugs," it said.
The paper said the economic consequences of the liquor ban were significant; before the ban, excise duty on alcohol was an important source of state revenues (14 per cent in the 3 years leading up to the ban).
"Moreover, enforcement expenditures on monitoring and anti-smuggling operations increased, widening the fiscal deficit further," it said, adding that, in short, the introduction of the ban has not served its intended purpose; instead, it has coincided with higher violence against women, loss of state revenues, and higher expenditures.
The authors of the paper said they believe it's time to reintroduce the excise duty at historical levels to achieve 14 per cent of state revenues.
The restoration of law and order was critical in Bihar's post-2005 recovery.
Following decades of corrupt practices, violent crime, and weak administrative capacity, the state government under Nitish Kumar began to emphasise policing, criminal prosecution, judicial reforms, and administrative accountability. Bihar's development is central to India's ambition of Viksit Bharat to become a developed economy by 2047, given that Bihar has the second largest population and remains the poorest state.
The paper identified six priority areas for the development of Bihar that are fundamental and interconnected to make a big push: education, health, governance and law and order, mitigation of recurring floods, private sector development, and women's empowerment.
"These reforms are essential for raising productivity, accelerating structural transformation, and creating high-quality jobs for its young population," the paper said.
The paper assesses Bihar's public debt dynamics and sustainability and quantifies the fiscal effort needed to finance alternative reform scenarios through stronger own-revenue mobilisation, more efficient and effective spending, additional support from the central government, and, if needed, further borrowing.
Bihar is the second most populous state in India (over 9 per cent of India's population) and is estimated to reach 13.2 crore (132 million) in 2026. It is larger than all but ten sovereign countries in the world (China, USA, Indonesia, Pakistan, Nigeria, Brazil, Bangladesh, Russia, Ethiopia, and Mexico).
