Who gains from a liquor ban?
Ullekh NP | 03 Dec, 2015
A Patna-based senior bureaucrat who sees the proposed prohibition move by Bihar’s Nitish Kumar-led government as a “fanatical misstep” claims that when Lalu Prasad of the Rashtriya Janata Dal (RJD)—now a member of the state’s ruling coalition—was Chief Minister, he had raised excise duty on all brands of beer except one sold by a close relative; the aim was clearly to kill competition. “Laluji has always placed his family interests above everything else,” says this officer, guffawing as he refers to the RJD leader appointing two of his sons to key positions in the newly formed government—one as Deputy Chief Minister and the other as health minister—of the Grand Alliance which won a landslide victory last month in a bitterly fought election against the rival front led by Prime Minister Narendra Modi of the BJP.
“Nitish will find it tough to implement his ‘in-phases prohibition’ aimed at protecting the interests of poor households where men end up as drunkards and wreck the lives of everyone in their family. The problem could be the nature of connections his major partner, RJD, has with the mafia and potential bootleggers,” says another official at the Excise Department who hastens to add that he is not handling “prohibition related” subjects. While Open couldn’t independently verify the claims made by these officials, it is well known that in their long stint in power, Lalu Prasad and his wife Rabri Devi had come under the shadow of corruption. Lalu Prasad had remote- controlled his wife’s government from jail after he was imprisoned in 1997 for conniving with suppliers and officials to fudge the figures of government grants and under-supplying fodder, medicines and so on to the state animal husbandry department. The Bihar government had incurred huge losses in what came to be known as the ‘fodder scam’, for which Lalu was finally convicted and disqualified as a Lok Sabha member in 2013. The RJD heavyweight cannot contest elections till 2021.
The announcement made by Chief Minister Nitish Kumar of the Janata Dal-United (JD-U) that he will fulfill an election promise made especially to women, and phase out alcohol in the state from 1 April 2016 has brought to the fore, once again, the hazards of imposing a ban or restriction on the sale of liquor, especially cheap variants consumed by the working classes. The move could result in the rise of bootleggers and criminal gangs, a far bigger scourge. In a state where law and order has been in a sorry state, especially whenever Lalu’s party was in power, anti-prohibition advocates say it is next to impossible to enforce the policy. “Nitish has said that there will be zero tolerance for those who flout new policy rules banning the sale of country liquor of all kinds, from mahua to other drinks, but then for Lalu’s party men who have a long record in abetting and patronising criminals, the line of tolerance starts somewhere else, not at zero. Haven’t you heard the famous Amitabh Bachchan dialogue, ‘Hum jahaan khade ho jaate hain, line wahin se shuru hoti hai’? That is the truth about many politicians and their men in Bihar,” avers a former close associate of Nitish, who, like most government officials, does not want to be named. He points out that Nitish wouldn’t be the first leader to restrict liquor sales in the state. The late Chief Minister Karpoori Thakur, a mentor to both Lalu and Nitish, had tried implementing prohibition when he was in power from 1977 to 1979, but had to reverse his stand in the face of a spike in crime and spurt in illicit liquor sales.
A section of Bihar’s officials as well as the likes of NK Singh, former Rajya Sabha member from Bihar, however, argue that the social compulsions that prompted Nitish to take this decision can’t be ignored. Singh is cautiously optimistic about the prohibition plan and believes that the Chief Minister and his officers know exactly what they are up to. “Rs 3,000-plus crore [forgone] in annual revenues is the economic price that people are talking about. There is another aspect of it. As farm incomes have gone up progressively along with the easy availability of liquor, there has also been untold hardship, especially for the womenfolk in the rural areas of Bihar where a good chunk of incomes disappear as male members consume huge quantities of alcohol. This has become a crucial problem. Responsible behaviour will take a long time to inculcate,” notes Singh, a former Nitish loyalist who is now a BJP member. “Therefore,” he adds, “we have to balance economic considerations with moral and social ones.”
Asked if the alliance that Nitish’s JD-U has forged with former archrival Lalu’s RJD, which houses a large number of leaders with reported links with the underworld, would thwart the Chief Minister’s plans, Singh, a former IAS officer of the Bihar cadre, replies, “A perfect prohibition policy has not been followed anywhere in the world. We have other parts of India where a prohibition policy has resulted in aberrations. In life, as in many other things, the proof of the pudding is in the eating. Let’s not pre-judge a governmental action.”
True, alcoholism is a dreaded problem that not only causes serious health complications, it often wreaks havoc in poor as well as rich households, undermines the self-worth and dignity of women who bear the brunt of drunken behaviour, and has several knock-on ill effects on society at large, including the encouragement of other vices and criminal activity. There is no denying that heavy drinking results in a huge public health burden. Economists who had zealously backed prohibition in the US (1920-1933) had argued that the legislation (18th amendment to the US Constitution) would boost health and wealth. Yale economist Irving Fisher had even forecast that a ban on alcohol would ensure a 20 per cent rise in industrial productivity. According to American historian Thomas Fleming, Fisher—a believer in eugenics, which dealt with ways to improve the ‘quality of the human race’—even cited ‘scientific’ tests that proved alcohol diminished a worker’s efficiency by as much as 30 per cent.
But the result of the massive exercise, fuelled primarily by puritanical Protestants, was as bad as bad can get. Fleming tells Open in an interview that there are several explanations for the optimism with which some scientists, including economists, regarded prohibition. “One is the widespread heavy drinking that prevailed in the US which disabled large numbers of people and made them unable to hold jobs or perform them well, if they did. Another reason is the influence of eugenics, a disease of the scientific American mind—no, let’s say the international mind. This false idea persuaded tens of thousands of intelligent people that public health could be turned into a vast programme that would transform the human race.” He goes on, “The idea is an offshoot of Darwin’s Theory of Evolution and was, in fact, originally suggested by a cousin of Darwin. Prohibition seemed to eugenicists more than justified for this reason, even though it soon included abusing the human rights of thousands of people in ways far more cruel than the tactics of prohibitionists.”
Fleming has long held that the impact of ban on alcohol in the US in the early 20th century persists even today in the operation of criminal gangs. The period saw the rise of thousands of bootleggers and criminals of the notoriety of Al Capone, who inspired several Hollywood movies and spawned a new genre of gangsta flicks. “I am like any other man,” the gangster had famously said, “All I do is supply a demand.”
Edward N Luttwak, an American historian and military strategist who has studied the subject of prohibition, says that it degrades health because illegal alcohol is often contaminated, often with poisonous methyl alcohol which is much cheaper than ethyl alcohol. “Prohibition is always supported by the criminal underworld, which is excluded once alcohol is legalised. In the US state of Virginia, ten rural counties (Bland, Buchanan, Charlotte, Craig, Floyd, Grayson, Highland, Lee, Patrick and Russell) still prohibit the sale of distilled beverages, allowing only beer and wine. Why? Illicit brewers make whisky, but not beer or wine,” he notes, suggesting that local governments in the state are hand-in-glove with the underworld.
Many Indian states, too, have toyed with prohibition, only to lift the ban later. States such as Tamil Nadu, Andhra Pradesh, Haryana and Mizoram have gone for prohibition at various stages due to a variety of reasons, including protests from women groups, the menace of heavy drinking, electoral calculations and so on. Such a ban was first put in place in coastal Andhra and a few of its neighbouring regions after C Rajagopalachari was elected Chief Minister of the erstwhile Madras state in 1952. The ban was subsequently lifted. Later, in 1994, NT Rama Rao rode to poll glory in Andhra Pradesh promising cheap rice and complete prohibition. It had to be withdrawn in 1997 after it led to a massive increase in the sale of illicit liquor and smuggling from neighbouring states.
Dr Parakala Prabhakar, a political commentator who is currently a communications advisor in the Andhra Pradesh government, remembers those prohibition years in the 1990s like “it was yesterday”. The ban enriched many people enormously because all the sales of liquor went underground, he says, emphasising that “despite having an efficient bureaucracy in place compared with other states, bootlegging became rampant in Andhra Pradesh in the mid-1990s”. Prabhakar concedes that if implemented well, it offers significant benefits and advantages because poor families are able to use all their income for useful things such as proper dietary nutrition and the education of children. “At the lower rungs of society, families will begin to lead better lives if the males don’t drink, but a mere ban on sale of liquor doesn’t help,” he states. People like him warn against lost state revenues reappearing as profits for crime gangs and their political masters.
The loss of government revenues becoming the private gains of mafia dons and politicians is a recurring story across states with bans or restrictions on the sale of alcohol. “States such as Gujarat, Manipur and Nagaland are some of the examples. Mizoram has finally managed to come out of the rot,” says a Delhi-based intelligence officer who has served in the Northeast. Last July, Mizoram repealed prohibition, more than 17 years after it was imposed under pressure, mainly, from the Presbyterian Church among others. Despite protests from the church, the government has been partially lifting the ban over the past two decades. Prohibition in the state was a joke, just as it still is in Nagaland where illicit brewing and smuggling from Assam are an everyday affair, says the intelligence officer. The situation is similar in Gujarat, the birthplace of Mahatma Gandhi, where prohibition has been in place for more than 50 years, and in Manipur, which is now thinking of lifting its ban. In Gujarat, while it is relatively cumbersome to buy liquor from ‘permit’ outlets where all kinds of documents have to be produced to prove that the buyer is not a resident of Gujarat, it is easier to procure alcohol from bootleggers who take phone orders and home-deliver their wares.
Kerala is one state that has experimented with a variety of bans and restrictions on liquor. In 1996, then Chief Minister AK Antony banned the desi drink arrack with an eye on the votes of women who outnumber men in the state. While excessive drinking remains a curse in Kerala, arrack continued to be available for years thanks to illicit brewers. A highly vocal minority of anti-liquor activists had cheered the move, but at least two senior police officers who spoke to Open believe that Antony’s decision led to the rapid growth of criminal gangs in the state. There is, of course, no data available to link the rise of “quotation gangs” (or hired guns) to the decision to ban arrack and raise excise duty on Indian Made Foreign Liquor (IMFL), they admit. Yet, it is an “undisputed truth” that the sale of ‘seconds’ (bottles on which tax is evaded) and thirds (those sold by bar owners by mixing drinks) increased manifold in the late 1990s, claims a senior police officer.
In August last year, in a ruse to browbeat his anti-liquor political rivals, Kerala Chief Minister Oommen Chandy announced a phased prohibition in the state. “This was not a planned move. It was a knee-jerk reaction without any kind of vision or idea of the consequences,” says CPM state secretary Kodiyeri Balakrishnan. The abrupt announcement—made with political calculations to silence the opposition within—led to the closure of 418 bars in the state last year. The sale of alcohol, though, was permitted in five-star hotels. The state-owned Kerala State Beverages Corporation Ltd now has a monopoly over the sale of drinks through its 350-odd outlets. Interestingly, the links that Kerala politicians have with liquor barons are the stuff of legend. Political leaders have often come under criticism for accepting the aid of liquor traders to finance their elections. Recently, veteran leader KM Mani had to resign as state finance minister after the High Court endorsed a Vigilance court directive to conduct a probe into allegations of his having taken bribes from bar owners for the renewal of expired liquor retail licences last year. In his book, Madhypante Manifesto (‘The Manifesto of a Drinker’), journalist Gireesh Janardhanan explores how in the game of one-upmanship among politicians and liquor kings, the customer—who contributes hugely to the state’s revenues—is often the main casualty. Despite exorbitant prices for liquor, the hapless consumer is often treated shabbily and offered spurious drinks, he argues. Many officials endorse this view.
Meanwhile, Johnson J Edayaranmula, director, Alcohol & Drug Information Centre (ADIC) India, says that the current liquor policy of the Kerala government has somehow led to a slide in the consumption of IMFL. According to ADIC, sales of such drinks are reported to have fallen by 8.7 per cent and those of beer by 9.9 per cent in 2014-15 compared with a year earlier. For Kerala, a state with India’s highest per capita liquor consumption, this is the first dip in 30 years. Edayaranmula contends that prohibition will succeed only if it takes into account three factors: the reduction of supply, demand (through awareness campaigns) and harm (through rehabilitation, counseling and other means). He feels that Kerala, unlike most states, is on the right track. “The fall in sales proves that the current liquor policy is producing results,” he insists, adding that his organisation had done a detailed analysis of drinking patterns in the state. However, several officials note that the slow shift from hard liquor to wine and beer (because of availability) is not a welcome change, given the high levels of alcohol in ‘strong’ beer and cheap wine. Besides, analysts like Edayaranmula don’t factor in the impact that a partial shutdown of bars has on tourist inflow and the hospitality sector. “Even the bars in five-star hotels are dingy and dirty and serve low quality drinks,” says a BJP leader, echoing Janardhanan’s complaint. After all, alcohol-determined harm, according to the WHO, is measured using variables such as quality of the drink, volume of consumption and the pattern of drinking.
“Prohibition is a much more extraordinary challenge for a state like Bihar where the bureaucracy isn’t as efficient as many other states,” says Prabhakar.
Much of the other criticism of the policy is harsher. The economist Jagdish Bhagwati had listed prohibition as one of several ‘Directly Unproductive, Profit-Seeking (DUP) Activities’ in a 1982 paper on the subject. A former finance officer of a liquor company calls prohibition “a farce”. Manu Remakant, a drink aficionado who runs the website, Rumroadravings.com, calls such laws “historical blunders”. Even in Islamic countries, such steps are not effective, he says. “In Russia too, rulers like the czars, Lenin and Mikhail Gorbachev have all fought long and losing battles to put an end to the country’s long affair with vodka,” he adds.
The hardship faced by poor women in Karnataka’s Kadahalli, Andhra Pradesh’s Dubagunta and Bihar’s Darbhanga has inspired plenty of anti-liquor activism over the years, much of it well intentioned. But then, prohibition also has a disproportionate effect on the poor who end up drinking cheap and unsafe bootleg liquor. Prohibition, partial or otherwise, is a battle in the name of the poor that is more often lost than won.