Liquor policy

 MPost |  2015-12-31 20:47:07.0  |  New Delhi

The apex court on Tuesday upheld the Kerala government’s liquor policy restricting the issuance of bar licenses to five-star hotels only. A court passed the order on a batch of pleas by Kerala bar owners, who had challenged the liquor policy claiming it to be discriminatory. Earlier the Kerala High Court had upheld the state government’s liquor policy which is aimed at making Kerala a liquor-free state by 2024. The apex court said the state government would consider taking measures for rehabilitation of those who will lose employment due to the policy. If the steps taken by the government are not satisfactory, the court said that the workers could approach the Kerala High Court or even Supreme Court. The bar owners, in their plea, have contended that the policy was discriminatory in nature and would lead to a situation where only the well-heeled have access to alcohol.  However, Kerala government had argued that the decision was taken by the state to not renew licenses was a policy decision.  

The aim, according to the state government, was to prevent young people from destroying their lives by drinking too much. Kapil Sibal, who represented the state government in the case, said that the policy was to protect the youth by providing them education and nutrition. Kerala accounts for 14.9 percent of India’s total liquor consumption. What’s, even more, staggering is that the state’s people consume liquor worth Rs 30 crore a day. In response, private bar owners had contended that this policy of “partial ban” was discriminatory in nature. They had also argued that this policy will lead to a situation where only the well-heeled will have access to alcohol.  In October 2014, the Kerala government decided to move gradually towards a complete ban on liquor in the state by shutting down 730 bars but had exempted heritage and four-star hotels. About 75 retail outlets have been closed since then. Subsequently, the Kerala High Court had upheld the state government’s decision.  However, along with its proposal and the subsequent court verdict, the state government could lose out significant revenue. Taxes on alcohol represented nearly a quarter of the Kerala government’s revenue. Beyond these facts, though, there are two key narratives that revolve around this verdict. 

The first, of course, is Assembly elections in the state due next year. The United Democratic Front government, which had proposed the liquor policy, has come under fire after certain bar owners had alleged that key ministers took bribes in return for allowing them to operate. Former Finance Minister KM Mani resigned over the allegations last month and Excise Minister K Babu has come under a vigilance probe. The UDF’s main opponent, the Communist-led Left Democratic Front, has been using these allegations as ammunition against the ruling government in the run-up to next year’s elections. The UDF government has expressed vindication over the apex court’s decision. However, the opposition believes that the adverse judgment for bar owners could compel them to expose more about the bribes they allegedly paid. According to Communist Party of India (Marxist) politburo member Pinarayi Vijayan, these new revelations could even lead to the downfall of the UDF.  

The second narrative is the impact the verdict could have on the liquor policy in other states. The judgment comes at a time when other states like Bihar are mulling a ban on the sale of liquor in the state. Bihar Chief Minister earlier this month had announced the state government’s decision to impose liquor ban from April 1 next year. Suffice to say, the proposal is facing intense opposition from the strong lobby of liquor vendors. Nitish Kumar had promised women voters that he would ban liquor – a move that paid rich political dividends. The massive sale of liquor, especially those that are country-made, and the consequent rise alcoholism, is a major social evil in Bihar. It is hard to argue against Kumar’s claims that alcoholism in the state particularly affects poor families and women, who have to bear the brunt of alcohol-abusing husbands. However, there is one key difference between the policy pursued by Nitish Kumar and the Kerala government. The former proposes a complete ban, on the lines of prohibition, while the other severely restricts the sale of alcohol. 

Prohibition has never succeeded anywhere in the world and it will only mean huge revenue losses to Bihar, already India’s poorest state. Gujarat is India’s only “prohibition” state. But according to news reports the prohibition lobby in Gujarat is financed by the bootlegger lobby. The ban has clearly not worked with liquor is freely available all over Gujarat. Going beyond India, the experience in America, where prohibition was imposed in 1920, and lasted till 1933, was that it gave rise to the mafia gangs which thrived during this period. Suffice to say, such a policy measure will never work, least of all in Bihar, and will only socially legitimise criminal activity. There are other ways to curb drinking such as higher taxes, limiting the construction of outlets and drinking places, and banning the sale of arrack or hooch in plastic pouches. The last state to introduce prohibition was Andhra Pradesh and it was a miserable failure. In fact, what we witnessed, as a result, was the rise of wealthy politicians, who stood to benefit. The road to disaster is paved by the need to implement policy decisions with good intentions.

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