International BusinessThe wages of prohibition
Business Standard / New Delhi July 16, 2009, 0:41 IST
There is little doubt that the Gujarat government spokesperson is right when he says that deaths due to consuming illicit liquor have taken place in even those states that do not have prohibition. To that extent, he is right in refuting liquor baron Vijay Mallya’s assertion that prohibition in Gujarat is the reason behind the ‘hooch’ deaths in the state. Nevertheless, the spokesperson cannot dispute the common knowledge that, after nearly a half century of official prohibition, liquor is freely available in the state, at a much higher price than elsewhere. And since it is not sold through the normal channels, and therefore necessarily involves the underworld, the liquor could well be of dubious quality as well. To the extent that scores of people have lost their lives after consuming country liquor with dangerous additives (intended to increase their potency), Mr Mallya has chosen to focus on the point where his business interest converges. But since the deaths have not been caused by Mr Mallya, the issue is not what he hopes to gain; it is what the Gujarat government should do.
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If there are liquor-related deaths in even the states that have given up prohibition, it is because they tax liquor heavily and thereby make illicit distilling a lucrative option. The fact that milder concentrations of liquor, as in beer, are available only at high prices, again thanks to taxation policies, adds to the problem. There is no shortage of studies the world over to show that the availability of milder variants is often a solution to the problems of addiction, whether of liquor or of hallucinatory drugs. That is why, in some countries, smoking marijuana is not a crime.
The other well-established consequence of banning alcohol, of course, is the fillip this gives to the mafia, as happened in the United States and other countries that tried prohibition. As time goes by, the mafia starts dabbling in other contraband items, from drugs to arms. It is strange that successive governments in Gujarat should blind themselves to these realities. The truth is that most cultures have known and lived with intoxicants; while prohibition may be an ideal, policy should reckon with the likely consequences in the real world. If the truth is that prohibition in Gujarat is counter-productive, in more ways than one, then that must be faced squarely and the policy changed.
Meanwhile, it is hypocritical of the Gujarat government to tell the 13th Finance Commission that it loses excise duty worth Rs 3,000 crore a year on account of prohibition (the liquor being sold in the state clearly doesn’t result in any sales tax revenue either). If the government is so keen on enforcing prohibition, it should not expect the Centre to pay for the revenue loss involved.