Andhra takes first step towards liquor ban, but will it work?

In a first step towards fulfilling its key poll promise of imposing total prohibition, the Jagan Mohan Reddy government in Andhra Pradesh has taken over the retail liquor trade on the lines of the Tamil Nadu model.

While the state government moved ahead with the implementation of the dry law in phases, there are serious doubts over its feasibility, particularly at a time when Andhra Pradesh is still reeling under its bifurcation blues and struggling to mobilise resources to fund its myriad populist schemes.

Earlier attempts of implementation of similar dry laws in other states have been unsuccessful. Haryana had banned liquor in 1996, but had to revoke it in 1998. Similarly, the united Andhra Pradesh’s tryst with total prohibition in 1994 barely lasted three years. Kerala had banned alcohol in 2014, but a change of government in 2017 saw the policy being reversed.

At a time when Andhra Pradesh is reeling under huge revenue deficit, imposing prohibition could further squeeze the revenues, besides throwing up other challenges like flow of spurious liquor and smuggling.

After bifurcation in 2014, the residuary Andhra Pradesh started its journey with a revenue deficit of ₹16,000 crore. It now earns around ₹6,000 crore from excise revenue. And there are doubts over the financial viability of the prohibition policy.

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A key poll promise and an emotional appeal

Prohibition was one of the key poll promises of the YSR Congress Party, which stormed to power in the April 11 elections.

During the election campaign, Chief Minister Jagan Mohan Reddy had said that he would not seek their votes again in the next election if he failed to deliver on his promise of total prohibition by 2024.

The prohibition will be implemented in a phased manner in the state. The government wants to run the wine shops all by itself and provide four jobs per shop, in a bid to temporarily address unemployment in the state. The excise officials are working out a system where one supervisor will head each shop, with three salesmen.

“We have drawn up plans to do it in a phased manner so that total prohibition can come into effect by 2024,” an excise official said.

Scaling down liquor shops

The prohibition and excise department has opened over 500 liquor shops under the first phase of prohibition. The government is planning to bring down the total number of liquor shops from 4,380 to 3,500 and eventually phase them out.

Once the new excise policy comes into effect from October 1, all liquor shops in the state will be run by the Andhra Pradesh State Beverages Corporation Limited (APSBCL).

The business hours of the retail outlets have also been curtailed. The shops will now operate from 10 am to 6 pm.

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Crackdown on unauthorised bars

To begin with, the government ordered an immediate ban on ‘belt shops’, the unauthorised bars run by the licensed retail liquor outlets in the state. The ‘belt shops’ have become a big menace, especially in rural areas, and are seen as a major cause for growing alcohol addiction in the state.

Last year, the excise officials had registered cases against 12,700 ‘belt shops’ and arrested more than 12,850 people.

There are over 4,380 wine shops and about 800 bars in the state. The excise revenue, which stood at ₹3,839 crore in 2014-15, rose to ₹5,789.67 crore in 2017-18.

In its second phase, restrictions would be imposed on the sale of alcohol. It will be confined to only five-star hotels and other premium restaurants. These phases will also be supported by de-addiction and awareness programmes.

“The objective of the new policy is to help the poor come out of the clutches of addiction. It would help if the sales are restricted,” an official said. Gearing up for the prohibition, the state would allocate ₹500 crore for setting up of de-addiction centres across all the 13 districts.

However, experts have expressed doubt on the feasibility of the dry law in a state that is struggling to mobilise resources to fund populist schemes.

“We have seen how prohibition policy has failed in several states across the country. At a time when we are aggressively seeking investments into the residuary state and desperately want investors to come in, we cannot afford such regressive policies,” said K Ramesh Babu, a senior analyst.

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A failed experiment

Andhra Pradesh’s tryst with dry law has been a spectacular failure in the past.

An anti-arrack agitation started by a group of women in Dubbaka village in the coastal district of Nellore in 1990 had soon snowballed into a statewide social movement. In the run-up to the 1994 elections, it had become a dominant issue.

TDP founder N T Rama Rao, who was then in the opposition, was moved by the plight of women spearheading the agitation and he promised to enforce a prohibition law if his party was voted to power.

With a dramatic flourish, Rao had announced that the first file he would sign as Chief Minister would be on banning liquor in the state. And, he kept his promise.

Within minutes of taking oath as the CM for a second time on January 16, 1995, he announced total prohibition in the state. As a result, four breweries and 24 distilleries producing potable liquor were shut and the state lost a revenue of ₹800 crore in the first year.

Later, some exemptions were chalked out. Those willing to purchase alcohol from special outlets run by the state breweries corporation had to produce a “doctor’s certificate” to buy alcohol. Such permits would cost ₹5,000 for individuals, and ₹50,000 for owners of bars or ‘permit rooms’, as they were called.

Soon, the state government had to grapple with rampant smuggling and free flow of illicit liquor, besides massive loss to the state exchequer.

Driven against the wall by administrative problems, financial worries and increased smuggling, the Chandrababu Naidu government finally decided to do away with the prohibition in 1997.

And the Andhra Pradesh Prohibition (Amendment) Bill was passed, ending the dry law from April 1, 1997. However, the ban on arrack still continues.

“Despite our best efforts, the prohibition-related offences, particularly illicit distillation and smuggling, have been steadily increasing in the state. The government has come to the painful conclusion that the Prohibition Act of 1995 required modification to bring it in tune with ground realities,” Naidu had told the Assembly while introducing the legislation to lift the prohibition.