It’s all very well for politicians to announce that they will impose prohibition to appease a section of their voters. But prohibition results in huge revenue loss for the State imposing it, even as consumption of alcohol continues hidden from the authorities. As a result, it is a few enterprising individuals with deep political and criminal connections who benefit from moves to prohibit the sale and consumption of alcohol. In Gujarat, for instance, where prohibition has been in place for nearly 60 years, obtaining a regular supply of some of the best quality spirits and wines is easy with good connections with bootleggers. The State authorities, however, remain in denial.

Indians are not going to stop drinking just because the law prohibits them. In any case the possibility of all States going dry is remote. If they were to, they would have to forgo the excise on alcohol — about ₹1,00,000 crore.

Gujarat estimated that it would earns about ₹125 crore as excise in 2015-16, mostly from short-term liquor permits issued to tourists and for health reasons. In comparison, Rajasthan and Maharashtra, where was were no such restriction, excise collections were estimated at ₹6,300 crore and ₹13,500 crore, respectively. For Rajasthan, State excise is over 13 per cent of its own revenues and for Maharashtra, about 10 per cent. State excise usually applies to liquor, narcotic drugs and psychotropic substances and medicinal preparations containing alcohol and narcotic drugs.

There’s some concerns that Tamil Nadu may be the next to go dry — the loss could be of the order of over ₹7,000 crore if it were to impose a Bihar-like ban on all alcohol. Bihar has projected only a 44 per cent drop in excise revenues due to this ban.

Alcoholism is a serious problem, but banning consumption rarely works, as Mizoram realised. State governments need to find other ways to deal with alcoholism rather than drive the liquor trade underground.

Senior Deputy Editor

Related Topics
comment COMMENT NOW