Ahmedabad: Gujarat`s illicit liquor-related tragedy brought the illogicality of prohibition back to national attention. The politics of empty symbolism being a strong force in India, it is unlikely Gujarat will anytime soon consider a rethink on prohibition. But prohibition is not the only irrationality in Indian policies on alcohol.
A cursory look at any state’s rules on liquor seems to suggest that no sober mind could have framed them. There are licence fees, auction fees, excise duty, sales tax, brand registration fee, import/export fee, vend fee, gallonage fee, turnover tax and more imposed on alcohol.
Governments will say all this is by way of sin taxation; the liquor business must be made to pay for the kind of products it offers. This is not an argument that a true liberal will accept. But liquor policy fails the test of even the official argument: even sin taxation can be more rational, less distortion creating.
If figures given by the All India Distillers Association are to be believed, the alcohol industry pays about Rs 25,000 crore as state taxes on revenues of just Rs 6,000 crore. This is odd, and speaks very poorly of India’s capacity to make intelligent policy. Liquor policy is also an example of federalism gone to policymakers’ head. There are 32 very different and distinct markets for alcohol in India, every state having made the effort to be very different from others.
Since all of this is justified by the official logic that consumption must be discouraged, it is interesting to see consumption figures. Nationally, liquor consumption is restricted to just 10.4% households in urban areas and 15.7% households in rural areas. If allowing alcohol makes for such proportionately small consumption figures, what is the rational for prohibition, which just makes the whole business corrupt and dangerous?
Social scientists should look at state-wise consumption figures with a keen eye. Smaller and poorer states return higher alcohol consumption figures, both for rural and urban households. In Arunachal Pradesh, Sikkim, Jharkhand and the Union Territory of Andamans, alcohol is consumed in appreciably bigger quantities than in rich states like Punjab and Maharashtra. Everywhere in India liquor with high alcohol content is drunk
more than those with low alcohol content, which is the healthier option.
Country liquor and IMFL, that unique Indian way of describing whisky, rum, etc, are consumed much more than beer and wine. And this is due to perverse taxation that makes lighter alcohol products more expensive. Again, this would seem strange in a country that invokes the Mahatma’s name to frown on alcohol consumption, but it’s a perfect illustration of what happens when high-mindedness mixes with low-quality policymaking.
