The Indian Liquor Industry Prohibition Story
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PROHIBITION IN INDIA Cont..Analysts claim that
the fact that the business of alcohol has been legal for so many centuries does
not negate the ill effects associated with it. If one strictly followed the
logic of the necessity of excise revenues, then governments might as well
legalize the narcotics, gambling and child labor businesses and earn
substantial revenues.
One of the biggest sufferers during this period were the players in the Indian
liquor industry. Though the financial implications of prohibition in only a few
states were reportedly not that high, the companies had to nonetheless live
with the constant threat of prohibition being imposed in some state or the
other.
A PROBLEM UNSOLVABLE
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Restraining the consumption of alcohol to safeguard
the interest of the society is a complex and complicated issue. According
to analysts, unless the state governments established well-defined
regulations; gained the complete co-operation of the enforcing
authorities; ensured a speedy disposal of cases; took tough action against
offenders; and set-up a fool-proof control system to prevent smuggling and
the emergence of illicit liquor businesses, it would be impossible to make
prohibition a success.
The Indian liquor industry argues that since the brewing of dangerous
illicit liquor is difficult to control, it would be advisable to make
safe, organized sector liquor available at reasonable, affordable prices.
By introducing differential taxes for hard and soft liquor (beer) the
illicit liquor evil could be weeded out. Instead of trying to curb the
consumption of liquor, the industry felt that state governments should run
sustained education campaigns in these states, advocating the virtues of
moderate consumption of alcohol. |
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By the end of 2001, partial prohibition in the southern
state of Tamil Nadu seemed to be failing miserably. During September-November
2001, over 85 people died due to the consumption of spurious liquor. Since the
state government earned substantial revenues from arrack and toddy sales, it
seemed to be unwilling to impose prohibition.
Meanwhile, in mid 2001, anti-liquor protests by women began once again - this
time in Kadahalli, a small village in Karnataka. As a result, issues like the
social responsibility of the liquor industry, its right to do business and the
viability of prohibition again began to be hotly debated. It was also rumored
that it was a matter of time before the Gujarat government lifted prohibition,
since it was finding it difficult to do without the Rs 18-20 billion generated
by excise duty on liquor sales.
QUESTIONS FOR DISCUSSION:
1. 'The regulatory authorities have no right to impose prohibition after having
allowed the alcohol business to grow into a Rs 60 billion industry.' Critically
comment on the above statement highlighting the economic, social, moral and
political aspects involved in the liquor prohibition issue.
2. Do you agree that alcohol consumption can never be completely eradicated and
it is impossible to successfully implement prohibition, especially in India?
Give reasons to support your answer.
EXHIBIT I THE INDIAN LIQUOR MARKET
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