The Indian Liquor Industry Prohibition Story
PROHIBITION IN INDIA
Soon after independence,
prohibition was imposed in the erstwhile state of Bombay. The first large-scale
movement against alcohol began in the 1970s, when rural women in various parts
of the country protested against the sale of liquor in their villages.
Explaining this, a news report commented, "Tortured to intolerable limits by
the abuse and beatings of drunk husbands and the hunger and poverty in which
their children grow and die, women have taken up chilly powder, broomsticks,
kerosene and match boxes as weapons of war." Over the next two decades, this
movement went on to encompass millions of rural women.
In 1990, the women of Dubagunta, a small village in
the Nellore district of the south Indian state of Andhra Pradesh began an
anti-arrack agitation. They pressurized men to swear that they would stop
drinking, physically restrained habitual drinkers, attacked liquor shops
and godowns and fought with the police, liquor mafia and the drunks. The
movement spread like wildfire to 800 villages throughout the state in a
short period of time. Women in these 800 villages not only prevented the
entry of liquor into their villages, but also prevented district
collectors from holding arrack shop license auctions. It was reported that
the women were beaten with rods, sticks, boots and rifle butts by the
liquor contractors' henchmen as well as the police force. Non-bailable
cases were filed against agitators who were then imprisoned. There were
even reports that many women activists were raped and murdered.
These events soon become a matter of national debate and eventually led to
the then Congress government of Andhra Pradesh announcing a statewide ban
on the sale of arrack from October 1993.
In the next state assembly elections, N T Rama Rao (NTR) of
the opposition Telugu Desam Party (TDP) promised total prohibition and made it
the party's main election plank. The TDP won the polls and NTR announced total
prohibition soon after becoming Chief Minister.
The AP government lost $ 362 million in annual revenues after the prohibition.
Despite new taxes on vehicles and consumer goods, the state's budget deficit
rose to $ 242 million. However, prohibition continued in the state till 1997. In
that year, the new CM Chandrababu Naidu lifted the ban on liquor, claiming that
he was forced to do so because of the state's financial problems. This move met
with unprecedented criticism in the media. Critics claimed that the state could
have easily avoided unnecessary expenditure on many other fronts, such as
salaries and various subsidies.
Besides AP and Haryana, Gujarat, Mizoram, Meghalaya, Kerala and Tamil Nadu had
also experimented with prohibition. While Gujarat continued to remain completely
dry even in late 2001, Kerala and Tamil Nadu had opted for a partial-prohibition
policy . Ten months after prohibition was imposed in Haryana, two surveys making
contradictory claims regarding the efficacy of prohibition were made public.
While the government-sponsored survey claimed that prohibition was successful,
the independent study said it had failed miserably. Covering all the districts
of the state, the latter survey interviewed over 900 persons, of whom 54% felt
that prohibition was a failure, 36% said it was partially successful, and only
8% said it was a success. The survey claimed that people were drinking openly
and the police was simply ignoring them.
A PROBLEM UNSOLVABLE
QUESTIONS FOR DISCUSSION:
EXHIBIT I THE INDIAN LIQUOR MARKET
ADDITIONAL READINGS & REFERENCES:
 Andhra Pradesh: The great
betrayal, www.indnet.org, April 29, 1997.
 Under a partial-prohibition policy, only country-made liquor is completely
banned while trading is allowed in IMFL with certain restrictions.
2010, ICMR (IBS Center for Management Research).All rights reserved. No part of this publication may be
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