Jagan's partial prohibition policy in disarray, liquor trade in high spirits

It was on December 2, 1948, the first-ever high-level committee constituted to study prohibition in the Madras province, headed by KA Nachiappa Gounder (MLA), submitted its report on the implementation of the Madras Prohibition Act (MPA), 1946 to the state government.

The other members of the committee were M Kumaran (MLA), N Sankar Reddy (MLC), A Vedaratnam (MLA) and T Subramanian, (Bellary district Congress president). GV Rangareddy, Prohibition Commissioner, Kadapa district was the secretary of the committee.

When the report was submitted, prohibition was in force in 16 districts of the province and, of them, seven was from the Telugu region. Barring Bellary, which is now part of Karnataka, other six districts (Anantapur, Kadapa, Kurnool, Chittoor, Nellore, and Guntur) are now in Andhra Pradesh and constitute nearly half of the state’s geography.

The committee chose eight districts viz., Chittoor, Anantapur, Kurnool, Kadapa, Bellary, North Arcot, Salem and Coimbatore to study the impact of prohibition. Incidentally, the majority of the districts were in the Telugu areas. Today, the Gounder report serves as a valid and relevant document, as the current prohibition in the state is also plagued by the same problems of the past.

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The history

Prohibition which came into force in Salem district on a pilot basis from October 1, 1937 was extended to Kadapa and Chittoor on October 1, 1938, and to North Arcot on October 1, 1939. The Rajaji government collapsed following his resignation on October 29, 1939 an in the absence of a popular government, the MPA was suspended in 1944.

Following Congress’ victory in the 1946 Assembly elections, Telugu leader Tanguturi Prakasam formed the government and reintroduced it in eight districts namely Anantapur, Bellary, Kurnool, Kadapa, Chittoor, North Arcot Salem, and Coimbatore, on October 1, 1946.

The prohibition was extended to Guntur, Nellore, Tanjore, Trichinopoly, Madura, The Nilgiris, South Canara and Malabar by the next government on October 1, 1947.

After touring four Telugu districts extensively, the Gounder committee had felt that the implementation was unsatisfactory because of official apathy, corruption and rampant smuggling, and distillation of illicit arrack in a widespread manner.

The committee pointed out that smuggling was taking place from Hyderabad, Mysore, Banaganipalle and Sandur. Smuggling took place despite the Mysore government’s assurance it would not issue fresh licenses to shops for five years along the border. Also, a five-mile dry-belt was created outside the borders of each district where prohibition is still in force.

Still, the committee felt that the implementation was unsatisfactory. “There has been all-round increase in all categories of prohibition offenses in all the districts except for Coimbatore… the secretion of contraband is generally found in the open, forest areas, porambokes, river beds, tank bunds, etc.,…In certain areas, the distillation has been made a lucrative commercial business…”

The committee found that apart from those who were traditionally engaged in illicit liquor production in pre-prohibition days, “several others who were not aware of the methods previously, have in no time learnt the art of manufacturing illicit arrack.”

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From 1942 to 1943, the state excise revenue grew progressively every year till 1945-46, when it reached a peak in 1946 with ₹16.42 crore. Following the reintroduction of prohibition in 1946 in eight districts, the revenue fell to ₹14.72 crore.

Prohibition turned out to be unsatisfactory, even when Mahatma Gandhi was alive and Gandhian values were held in high esteem. The experiment fell apart. Unable to curb the menace of prohibition violations, the newly-formed Andhra state favoured lifting the dry law.

The problems listed in the Gounder Committee Report dogged the second experiment as well, when TDP’s NT Ramarao went ahead and introduced total prohibition in 1995. His successor N Chandrababu Naidu revoked the ban in 1997.

New Excise Policy, 2019

Seventy-five years after the Gounder Committee report, now YS Jaganmohan Reddy brought about a new Excise Policy in October 2019, claiming it would pave the path for total prohibition by 2024.

As part of the new policy, the state took over all the retails outlets and slashed the number of outlets by 33 per cent and bars by 40 per cent. The business hours have been reduced by two hours. Later in May 2020, and to make liquor out of reach and unaffordable to the common man, the government hiked the prices by 75 per cent making the liquor costliest in Andhra Pradesh (AP) in the country.

The policy, however, has opened the floodgates for contraband from Karnataka and Telangana, where liquor is far cheaper than in AP.

Sensing the dangers posed by the policy, in just four months, in September, following the seizure of illegal liquor smuggled from neighbouring states, Chief Minister Jaganmohan Reddy reduced the prices of certain categories of liquor to bring parity with prices in Karnataka and Telangana. However, the prices of premium brands have been increased from ₹40 to ₹140.

Exactly two years later, Jagan’s policy of partial prohibition has gone for a toss. Liquor is available everywhere. Despite the reduced number of shops, the limited working hours and hiking the prices of liquor, the trade is flourishing.

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According to the excise department statistics, liquor sales witnessed a whopping 50 per cent jump in 2021. As for the individual depots, Guntur 1 stood first with an increase of 143 per cent, while Vijayawada 1 reported growth of 120.8 per cent. The depots of Vijayawada 3, Gunture 3, Chittoor 2, Kurnool, Proddutur, West Godavari 2, Srikakulam, Anantapur, Nellore 2, Vizag 2 have all reported a boost in sales by 50 per cent to 90 per cent.

Curiously, the brands available in government outlets are unique to the state and are sold at exorbitant prices. If one waits at any wine shop, one can recognise the crowds from low-income groups thronging the shops. Where is the money coming from for this low-income group, when economic activities have not fully recovered?

Prof Krishna Naik of the department of history, Sri Krishnadevaraya University and human rights activist Dr S Chandrasekhar cannot rule out diversion of a sizeable portion from Jagan’s cash transfer schemes like Ammavodi to these liquor outlets.

According to them, though the money is transferred to the accounts of mothers as education assistance, it is difficult for the women to save it from the clutches of their alcoholic husbands.

Whatever little these low-income groups earn, a portion is bound to go towards the purchase of cheap liquor sold at unusually high prices. “It’s not the liquor, but Jagan’s style of prohibition that is ruining families,” Dr Chandrasekhar told The Federal.

“Before Jagan, liquor was relatively cheaper. Most of the brands now are not only strange but are costlier than anywhere in India,” pointed out T Naveen Reddy, a veteran journalist from Anantapur.

“For instance, a beer branded as Kingfisher Spam is sold at ₹230. A peg of Mansion House Rare Spirit costs ₹260. Regular customers are spending somewhere between 50 per cent to 80 per cent more than what they used to do before Jagan’s style of prohibition came into force,” said Reddy.

While low-income groups make do with cheap liquor with weird brands at higher prices, the supply of premier brands for the middle-class and the rich are taken care of by contraband from Telangana, Karnataka, and to some extent from Tamil Nadu, Reddy added.

Though risky, smuggling from Karnataka has become a night-time occupation for many unemployed youths from border areas of Anantapur-Karnataka.

Former minister and TDP leader, Kalva Srinivasulu had an interesting story to narrate about smuggling. “Many liquor shops have sprung up in villages abutting Andhra border in Karnataka. Liquor bought from these shops is smuggled in the night through rural areas. They get ₹1,000 for making one trip. It is a great attraction for the rural unemployed,” said Srimivasulu, who had represented Rayaduram constituency.

Illicit arrack distillation, which was a rarity earlier, has reared its ugly head, following the hike of prices. Those who cannot afford even the cheapest of IMFL, are forced to look towards illicit liquor.

A massive seizure of illicit arrack stands testimony to the state of affairs. On Sunday (September 15), Rajat Bhargav, special chief secretary, revenue, told the media that the government has taken a very serious note of illicit distillation in the state and is committed to curbing it with an iron hand.

During the year 2020-21, 59,873 cases were booked in respect of illicit distillation operations, and 46,872 persons were arrested. Further, Bhargav said that 7,71,288 litres of illicit arrack were seized and 2,19,55,812 litres of fermented jaggery destroyed.

Yet, the Andhra Style of partial prohibition seems to be making all the players in this space happy: the state is happy with increased sales; the guzzlers are happy; many cash transfers schemes are helping offset the cost, moreover the smugglers are happy since the illegal trade is flourishing, and finally, the middle-class is happy as well. They get their supply of premier brands by liquor from Karnataka and Telangana.