December 11, 2015 Print

The destructive effects of prohibitionist policies are evident throughout the world, but officials in the state of Bihar in East India have said they will ban alcohol beginning in April 2016. Atlas Network partner the Centre for Public Policy Research (CPPR) has long been an advocate of liquor trade liberalization, and recently received significant media attention for its work when CPPR Chairman Dr. D. Dhanuraj appeared on CNBC TV 18 to explain why alcohol prohibition creates a wide array of new problems without solving the old ones.

“We have global experience; we have regional experience,” Dhanuraj said during the CNBC interview. “The global experience is from countries like the U.S., where they had banned alcohol consumption, alcohol sales in the early 20th century. But they failed in the attempt. They figured out that liquor bans, in fact, created black markets. And the same is the case with the liquor ban that is existing in four states in India.”

Three states and one territory in India already have at least partial liquor bans in place, and black markets in alcohol sales have proliferated in those regions, with thousands of illicit liquor shops springing into business from 2007 through 2013, especially in rural areas. Illegal status for alcohol also leads to unsafe homemade products that claim hundreds of lives each year, and devastates livelihoods for millions of farmers, as CNBC reporter Shereen Bhan pointed out during her questioning of a Janata Dal (United) (JD(U)) party leader who supports the ban.

“Whether it's the black market that's actually created on account of prohibition, or it's the history of hooch tragedies, or hooch-related tragedies that we've seen — in 2015 itself, 102 people dying in Mumbai; in 2011, 170 in Sangrampur in West Bengal; 2009, 136 in Gujarat; 2008, 148 in Tamil Nadu,” Bhan said. “Or it's the impact on sugar cane farmers, 35 million of them.”

Bhan also pointed out that the JD(U)’s call for liquor prohibition is inconsistent with its prior policy stances, such as when it attacked the rival Bharatiya Janata Party (BJP) for its own calls to regulate people’s personal lives and choices.

“Ahead of the elections, the JD(U) went after the BJP saying that you should not tell people what they should eat, what they should wear, who they should talk to, and so on and so forth,” Bhan said. “Aren't you converting Bihar into a nanny state?”

CPPR produced its groundbreaking study, “Liberalizing Liquor Trade in India,” with a grant from Atlas Network’s Liberating Asian Enterprise project. This project encourages Atlas Network partners in Asia to conduct original research and marketing projects that focus on overcoming obstacles to market exchange and examining the sources of cronyism that undermine free, competitive markets. CPPR’s liquor trade liberalization study has also received media attention from Hindu BusinessLine, Times of India, and BBC India.