(by A.A.K.)
IT WAS the classic shot-chaser combination. First India’s Supreme Court upheld a recent decision barring retail sales of alcohol within 500m of a state or national highway. Then it extended the ruling to hotels, restaurants, bars and pubs. Employing the indisputable logic of bar arguments, the judgment is aimed at curbing drunk-driving. However it will also hit a third of India’s booze shops, affecting 1m jobs and annual sales of about $10bn. But wily Indian entrepreneurs are already devising ways around the ban. How are they doing it?
India’s sober stance on liquor is enshrined in the constitution, which encourages prohibition—except when consumption of spirits is for “medicinal purposes”. But taxes on alcohol, which fall under the jurisdiction of India’s 29 states rather than the federal government, also generate a quarter of the states’ income. Each state sees it different: Gujarat, the birthplace of Mahatma Gandhi (a noted teetotaller), banned it entirely in 1961. Tamil Nadu’s state monopoly employs 30,000 people and nets $4.5bn worth of taxes every year. Andhra Pradesh slashed duties on cheap Indian-made booze to boost volumes. But prohibition is gaining followers: Bihar, where a third of the population is wretchedly poor, went dry last year. Two more states have similar plans. And all states, whether dry or swimming in the stuff, impose heavy tariffs on imported plonk and demand mountains of paperwork to issue liquor licences and other approvals.
Wary of receiving visits from officials with measuring tapes but unwilling to stomach the losses from shutting shop, some business-owners have come up with ways to adhere to the letter of the judgment, if not the spirit. One bar has constructed a maze with pre-fabricated concrete walls that artificially increase the distance from its front door to the highway to just a little over 500m. The zigzag warren leading up to the watering hole has been nicknamed the “Wall of Love” and cost some 200,000 rupees ($3,000) to build.
Some five-star hotels have shut down their main entrances; instead security guards shepherd customers through a roundabout route reserved for the staff. Visitors to a swanky mall in Gurgaon, near New Delhi, must now drive around the neighbourhood and take a U-turn before entering its bars. State governments are joining in. West Bengal has reclassified national highways as arterial roads, which fall under the jurisdiction of local authorities.
In Punjab, state highways have become “urban roads”. Maharashtra, with Mumbai as its capital, stands to lose more than $1bn in taxes; it is searching for a similar solution.
As sober readers may have concluded, the ban fails to address the real problem—or indeed any problem at all. Although India’s rate of alcohol consumption per person is among the lowest in the world, about half of its tipplers are actually binge-drinkers; and many of these guzzle cheap, unlicensed hooch. Between 2012 and 2014 more than 3,000 people died from consuming badly distilled moonshine. New bans do nothing to stop this trade.
Indeed Gujarat, which has been dry for decades, is home to a thriving business in bootleg booze, including perfectly good stuff, complete with home delivery. The state never sees a penny from these sales. And India already has plenty of laws against drunken driving. Better than blanket bans would be strict enforcement. In Mumbai, drivers caught with stinky breath and slurred speech can avoid a big fine by handing over a 500-rupee ($7.80) note along with their driver’s licence.
(Source: The Economist)