Liquor Ban | Lessons Jaganmohan Reddy can learn from neighbouring states

YSRCP chief and Andhra Pradesh CM Jaganmohan Reddy

Experience shows it takes many more failures to achieve a few successes when it comes to enforcement of prohibition. Now it is the turn of Andhra Pradesh Chief Minister YS Jaganmohan Reddy to learn the lesson, and perhaps the hard way.

As the New Year dawns his state is set to embrace a limited phase of prohibition, to be in line for a complete ban by 2024. The state will have a new policy for issuing bar licences, which will henceforth cost multiple times of the current rates. His government has already taken over retail sales of liquor and brought it under the State Beverages Corporation. Also, the number of vends has been reduced by a few hundreds and the government plans to reduce the number of operating hours for the bars.

The actions correspond to the policy framework of Reddy, under which anything that is contrary to what Chandrababu Naidu had been doing makes both political and economic sense. Liquor was flowing freely during Naidu’s rule as he reversed a ban put in place by former Chief Minister, founder of the Telugu Desam party (TDP) and his father-in-law NT Rama Rao. Reddy hopes that his prohibition would find favour with the womenfolk, who are the worst victims of their men’s addiction and thus be able to politically consolidate his support base among them.

The plan sounds perfect on paper, but when it comes to implementation, it is a different ball game. The same rationale by Bihar Chief Minister Nitish Kumar produced entirely unintended results. Despite claims to the contrary, the crime rate in Bihar increased by over 13 per cent in the first year and about 25 per cent in the second year after the introduction of a liquor ban. Further, it has disrupted the delivery of justice, with the courts having been burdened with over 200,000 prohibition-related cases. This is in addition to other criminal cases. Also, those who get booked are mostly from the lower strata of society, who have no means to defend themselves.

It has been found that the ban on liquor does not eliminate alcohol consumption or even reduce its levels. It only changes the pattern of trade, which gets pushed underground. It also leads to the use of abusive substances, which has a much more pernicious effect on the society.

A typical example is that of Kerala, which has alternated between restrictions and easing. The Kerala case is particularly interesting as the state holds the record for the highest per capita consumption of liquor in India. According to published data, each Keralite consumes over eight litres of alcohol per year, which is well above the national average of 5.7 litres. Income from liquor manufacturing and sale is one of the primary sources of revenue for the state government.

The previous Congress-led United Democratic Front (UDF) government in the state had restricted the availability of liquor by ordering the closure of all bars in three- and four-star hotels. This led to massive job losses, but that was the least part of the problem. The state saw a steep increase in the use of drugs, especially among the youth, which reached alarming proportions. The current CPI(M)-led Left Democratic Front (LDF) government has allowed the bars to reopen and is even thinking of opening more pubs to enhance the ‘quality’ of drinking.

Andhra Pradesh has a well-entrenched country liquor industry, which can now be expected to go into full throttle. This could also give rise to several illegal practices, which play out in the form of hooch tragedies and the state is no stranger to this evil. So, how far Reddy’s liquor policy can bring succour to women remains to be seen.

There is little doubt that the policy will force the state government to forego thousands of crore rupees worth of excise revenue, which amounted to Rs 5,789 crore in 2017-18. This could put further strain on the state finances, which is already in dire straits due to the massive debt inherited by the government. The Naidu regime had virtually emptied the coffers due to its prodigal spending.

Given that prohibition has not really succeeded anywhere except perhaps Gujarat, the longevity of the ban is uncertain. No wonder that the Andhra Pradesh policy change has had only limited impact on the stock prices of liquor companies so far. When Kumar introduced a total ban in Bihar, some of the companies had taken a hit, but the share prices were back to normal as the change sunk in.

The law of diminishing returns can be expected to catch up with Reddy sooner than later as he realises the unsustainability of mere populism.

K Raveendran is a senior journalist. Views are personal.