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Thursday, April 19, 2018

The Kerala model

The LDF bucks populist calls for prohibition and offers a pragmatic approach to liquor trade and consumption

By: Editorial | Published: June 10, 2017 12:26:54 am

The Left Front government in Kerala has wisely reversed the state’s liquor policy, which sought to impose prohibition in a phased manner. The new policy, which will kick in from July 1, is pragmatic in its scope and intent and should lend a hand to the state’s flagging tourism economy and boost state revenues. The decision bucks the current populist sentiment towards prohibition, which frames alcoholism in moral terms and sanctions state intervention in the form of bans on distribution and consumption of liquor instead of education and regulation.

The previous Congress-led UDF government introduced a policy months before the 2016 assembly elections, that limited bars to hotels in four-star and above categories. It also promised a phased reduction in the number of liquor vends with the intent to make liquor, other than wine, beer and toddy, unavailable in the state over 10 years. The policy received endorsement from the Supreme Court when bar owners appealed against it. A significant section of the civil society, particularly the clergy, supported the UDF government’s decision. The Left Front braved this seemingly powerful consensus for prohibition to argue for temperance. In its poll manifesto, it promised a rollback. There are sound reasons why regulation is preferable to prohibition. Past experience suggests that prohibition drives production and supply of alcohol underground and facilitates a black market. Evidence shows that alcoholics are unlikely to quit drinking when liquor is unavailable, but chase other addictive substances. Prohibition also bleeds the government financially — the Kerala government had estimated an annual loss of Rs 8,000 crore in excise revenue. The tourism sector, a major source of employment and revenue, was badly hit by the restrictions of liquor sale and consumption.

The Left Front’s new policy aims to address supply and demand issues as well as the concerns of workers engaged in the liquor economy. It also approaches liquor consumption and alcoholism as separate issues and prescribes different solutions. The government has proposed deaddiction centres in all district headquarters to address alcoholism while raising the licence fee and the age for drinking to disincentivise supply and consumption. However, the reasoning behind the insistence that a hotel must have at least a three-star status defies logic. Why must the state disallow smaller hotels and restaurants from seeking a bar licence if they are willing to pay the stipulated fee?

Such segregation is not just irrational but also stifles the tourism economy, which does not revolve around multi-star hotels.

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