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Liquor policy

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  9 Jan 2017 12:00 AM GMT

When it comes to the debate on banning liquor to serve a social cause, successive governments in Assam have made it clear on which side of the divide the State stands. Liquor has been contributing handsomely to the coffers of this revenue scarce State, reportedly Rs 1,200 crore as excise per year on average at present. The BJP-led government in the State is not only happy to let matters be, it has been taking steps to boost excise revenue. The number of dry days in a year has been cut from 15 to 4 and excise rules tweaked to keep wine shops open for longer periods (from 11 am in the morning, instead of 2 pm as earlier). The State government wants to market local ethnic brews as ‘heritage’ liquor; Fince minister Himanta Biswa Sarma presenting the budget last year, extolled the ‘healthy and medicil’ qualities of these brews, spoke about conducting proper research and packaging the brews attractively ‘so that these can compete with Goa’s feni’. Hiking excise duty on liquor is no longer an easy option for the Assam government, as was the case in 2015 — a 70 per cent hike in excise duty resulted in over 20 per cent slump in liquor sales, thereby leaving the Excise department with Rs 200 crore loss in revenue. It was found that pricier liquor in Assam caused diversion of the trade to neighboring states, prompting Fince minister Sarma to call for a ‘uniform tax structure’ in the entire Northeast to prevent such trade diversion and revenue leakage. For the State government presently, taxing liquor is an exercise needing great care, as it has to keep a wary eye on states like Meghalaya and Aruchal Pradesh where liquor is sold cheaper. Another problem for Dispur is to keep a tight leash on Excise officials and cut down on revenue leakage. This dependence on liquor here (never mind its social consequences) is in marked contrast to the debate elsewhere in the country over banning liquor.

For most state governments, prohibition does not come easy as liquor revenues form a considerable chunk of government funds, while smugglers bringing in contraband liquor make a mockery of any ban and drive the trade underground. In the Northeast, galand has enforced prohibition since 1989, but bars and wine shops still operate clandestinely there. Mizoram and Manipur too have flirted with liquor bans, only to backslide with change of government. It is against this backdrop that the prohibition drive in Bihar needs to be seen. Not only has chief minister Nitish Kumar stuck to his guns, he is even using his anti-liquor policy to keep up his tiol profile as a good administrator. Carrying out a phased public outreach campaign, the Bihar CM is now claiming that while critics had predicted excise revenue losses to the tune of Rs 5,000 crore, people of the state are now saving Rs 10,000 crore. He is furnishing data like 55% decrease in road mishaps, 24% in murders, 16% in robbery and 37% in riots, along with significant rise in public spending on children’s education, food, clothes and household equipments — in the seven months since total (and draconian) liquor ban was clamped in the state. He has even called the Supreme Court’s order to ban liquor shops on tiol and state highways a vindication of his policy, challenging Prime Minister rendra Modi to enforce prohibition at tiol level. In turn, Prime Minister Modi has praised the Bihar CM for the ban, which political observers have dubbed ‘quid pro quo’ for Nitish Kumar’s support to demonetization. The ruling JD(U) is now mobilizing around 3 crore workers and supporters to form a 3,000 km long human chain on January 21 in Bihar as part of the prohibition campaign. Even Madhya Pradesh, which earns Rs 7,500 crore as excise duty from liquor sale, may go the Bihar and Gujarat way — with chief minister Shivraj Singh Chouhan recently asking top police officials to correlate the issues of crime and liquor consumption in the state. It is thus evident that the social costs of a free liquor policy simply cannot be brushed away as irrelevant, particularly in a State like Assam where successive regimes have made a virtue out of the tippling vice.

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