Bihar has recently prohibited the sale of alcohol. Alcohol is basically harmful to people’s health. It subdues the mind. Thus, it is said that an inebriated person does not tell a lie. He does not have control on his mind to be able to tell a lie. The thoughts in his heart come out spontaneously. However, the same lack of control leads to traffic accidents, domestic violence and the like. Hinduism, Christianity and Islam all, therefore, discourage the consumption of alcohol. In this background, it is alarming that a study by the Organisation for Economic Cooperation and Development, found that the per capita liquor consumption in India grew at 55 per cent in the two decades ending 2012. Another study by the World Health Organisation found an increase of 38 per cent in the per capita alcohol consumption in India in the last decade.
Various State Governments have banned the sale of alcohol to save people from the negative impacts of drinking. However, prohibition has universally failed in controlling the consumption of alcohol. Prohibition was imposed in the United States in 1920. That led to the development of liquor mafias. The supply of liquor continued—only it went underground. The policy had to be reversed in 1933. The liquor mafia had become entrenched in this time though. These mafias started looking for other sources of income such as smuggling to make up the loss of income from the illegal sale of liquor. The short term benefits from prohibition, if any, were cancelled by the creation of this mafia which has created a long term problem. Markandey Katju, former Justice of the Supreme Court says that the policy of prohibition in Bombay gave rise to the Bombay underworld, and eventually to the development of figures like Haji Mastan and Karim Lala, and later Dawood Ibrahim. The well-oiled system of “haftas” is the cornerstone of bootlegging, he says. The government has many a time made efforts to ban the import of gold into the country. That led to an increase in smuggling without a reduction in the imports. Ultimately the government had to allow imports legally. These ground realities indicate that it is not possible to ban the consumption by legal means. The problem is so widespread that law is helpless. I was once standing in a bus while travelling from Udaipur to Ahmedabad. After I got down, as I was tired, I persuaded a truck driver to take me to my destination. The driver stopped on the way and loaded liquor filled in tire tubes. The large number of deaths due to the consumption of illicit liquor in Gujarat indicates that the supply remains unabated.
No wonder the Left Democratic Front government in Kerala is planning to reverse the policy of prohibition implemented by its predecessor United Democratic Front government. One argument given in favour of this change is that there has been a huge rise in drug consumption in the state. The fact is that people need relief from the day to day troubles of life. They seek this relief in liquor. In the 70s, while I was doing social work in the slums of Bengaluru, a breadwinner of one family used to walk miles every day collecting empty tins and bottles. He was tired and distraught by the time he got home. He could not sleep or go to work the next day unless he consumed alcohol. Banning alcohol deprives such troubled persons of the small relief they get from the consumption of alcohol. By making prohibition we only push them to seek other ways of seeking that same relief. Thus, drug consumption increased in Kerala.
Another dimension of the problem is the burden of tax on people. The government needs to collect taxes. Liquor provides about 20 percent of the revenue collected by the state governments. The question is whether these taxes will be collected from harmful products like liquor or from beneficial products like clothes. The Bihar government has increased the tax on clothes to make up for the loss from the sale of liquor. This means the government is providing disincentive to buying of clothes. Even this would be acceptable if prohibition was implemented. In that case, the people could pay more for the purchase of clothes from the savings made from the purchase of liquor. However, if the consumption of intoxicants only goes underground, then this becomes a cause of double loss. Income of the family continues to be frittered away in consumption of liquor procured illegally while people have to also pay more for the purchase of clothes.
Successful implementation of prohibition requires a social consensus. For example, there is consensus in the society that one should not steal. In such a case, people assist the police and the thefts can be somewhat controlled. On the other hand, people believe that they must give money to their daughters while getting them married. They often see this as giving share of the daughter from her parent’s wealth. Thus, people do not assist the police and dowry is not controlled. The point is that law works only where there is social consensus. There is no consensus on the harmful effects of liquor hence prohibiting the same is seen by people as an intrusion on their personal lives.
We must take a lesson here from Islamic countries. Many have created a social consensus against liquor on religious considerations. They advise the troubled to seek relief in religion rather than liquor. Liquor though is still often available despite both social consensus and legal prohibition against it. Prohibition in India is doomed because the government is not able to build a social consensus. The government must therefore call a grand conference of the Hindu, Muslim and Christian religious leaders and build a consensus against liquor. Prohibition has half a chance of success after that.
It is counterproductive to impose prohibition without building a social consensus. The drinker will be hit because he has to buy liquor illegally at a high price. The troubled persons who find relief in liquor, howsoever temporary, will be hit because they will be deprived of the relief. The ordinary consumer will be hit because he has to pay more for cloth and sweets. The state government will be hit because of loss of revenue. The only gainer will be the mafias and the police.
The author was formerly Professor of Economics at IIM Bangalore.