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Jagan promises to ban alcohol in Andhra, sparks questions on its viability

Andhra Pradesh experimented with alcohol ban nearly 25 years ago in 1995, a year after Nandamuri Taraka Rama Rao (NTR) became chief minister for the third time. In fact, his electoral success was partially credited to his promise of banning spirits.

Written by Leela Prasad | Vijaywada |
Updated: April 11, 2019 3:06:30 pm
YSRC chief Jagan Reddy at a rally in Andhra Pradesh.

One of the nine election promises, popularly referred to as Navaratnalu, made by YSR Congress Party (YSRCP) chief YS Jagan Mohan Reddy is that he will ban alcohol in Andhra Pradesh if voted to power. He plans to do it in three phases.

In the first phase, Jagan said, he will reduce the number of liquor shops and increase awareness about the harmful effects of alcohol. In the next phase, the taxes will be increased so that the poor and middle class will no longer be able to afford it. In the third and final phase, alcohol will be made available only in five-star hotels, and those found brewing or selling liquor will be sent to jail.

Responding to Jagan’s poll promise, Excise Minister Kothapalli Samuel Jawahar in the ruling Telugu Desam Party government in Andhra Pradesh told indianexpress.com, “It is his (Jagan’s) party that freely supplies liquor to people to attend rallies…Jagan is cheating the people with such promises. It is not feasible.”

Andhra Pradesh experimented with alcohol ban nearly 25 years ago in 1995, a year after Nandamuri Taraka Rama Rao (NTR) became chief minister for the third time. In fact, his electoral success was partially credited to his promise of banning spirits. The move had not only resulted in loss of revenue to the state but also jobs, including those in the state-owned breweries and distilleries.

Antecedents to the blanket ban can be traced to an anti-arrack movement speared headed by neo-literate women in 1992. With Eenadu, the state’s largest circulated Telugu daily, lending weight to the movement, NTR promised he would bring in liquor prohibition. However, the ban was reversed by Chandrababu Naidu, who became chief minister after leading a coup against his father-in-law, NTR.

Naidu cited the loss of revenue and liquor being smuggled in from surrounding states as the reason.

Andhra Pradesh State Wine Shop Dealers’ Association president Rayala Subba Rao told indianexpress.com, “You cannot put a price on the health of the public. Drinking is not a good thing but it will be hard to implement the ban. It is hard because all the districts in Andhra Pradesh have open borders with other states.”

Andhra Pradesh experimented with alcohol ban nearly 25 years ago in 1995, a year after NTR became chief minister. (Express archive)

Excise duty and Value Added Tax on liquor remains a major source of revenue for the state government. In the 2019 budget, the state said it was expecting to earn Rs 7,358 crore (2019-2020) from excise duty alone. In the last five years, the average total earnings from the sale of liquor has remained above the Rs 10,000-crore mark. Besides sales, the government also earns from issuing permits for wine stores and bars. While licenses for wine stores are auctioned and renewed every two years, bar owners would have to shell out anywhere between Rs 10 lakh and Rs 30 lakh, depending upon its size and location, for a permit of five years.

Kamal, who runs several wine shops and bars, questions how Jagan will fulfill his promises without the revenue generated from liquor sale.

“If we need a stable government, we have to gain some income. If you say alcohol ban all the time, then what happens? They are so many depending on this. How much revenue is coming. If they ban even this, then the government won’t run. They are earning Rs 13,000 crore only from wine shops from 13 districts in Andhra. If they are saying no to this income, then how can they promise sops of Rs 1,000 to Rs 2,000?” he said.

The 750 people working for him will lose their jobs if the ban is imposed, Kamala adds.

Subba Rao, a cashier at a wine shop, agrees that the move will lead to heavy job losses in the industry.

“So many people lost their jobs during the earlier ban. Take a rickshaw driver, for example, he drives the entire day and earns around Rs 200 per day. At the end of the day he spends Rs 30-40 on liquor. If there is a ban then they will buy it in black for Rs 100. What will happen to their wife and kids. Those who drink will not stop. Those who sell will not stop. Liquor will flow into the state someway or the other,” he said.

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