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Banning booze...

An issue rocking Tamil Nadu politics is the re-introduction of prohibition of liquor. With elections to the state assembly due in the next 9/10 months, parties in opposition are demanding an end to the current liquor policy.

 The AIADMK government is worried over the impact of a huge loss of revenue by re-introducing prohibition. Excise income from liquor sales made through the state outlets of the Tamil Nadu State Marketing Corporation(TASMAC) is estimated around Rs 25,000 crore, forming around 15 per cent of state’s total revenue receipts for this year.

The state’s finances are not elastic. In total debts of the state, of around Rs 211,483 crore budgeted for 2015-16, a sizeable chunk, of around Rs 30,000 crore, of the state’s budgeted expenditure, goes for debt servicing including interest payments. Staff costs, including pensions, account for around Rs 60,000 crore. The state spends another around Rs 59,000 crore towards subsidies for food, power and a host of other freebies. These three heads together consume almost the entire revenue receipts of around Rs 150,000 crore leaving little resource for development.

Karunanidhi as chief minister scrapped prohibition in 1971 on the pretext of widespread bootlegging and difficulty of enforcing prohibition. After the humongous human suffering and havoc caused, DMK supremo Karunanidhi is re-thinking and indicates including the scrapping of the current liquor policy as the DMK party’s 2016 election platform. Other parties in the state – the PMK, VCK, Congress… – demand prohibition.

The havoc caused by liquor has indeed been extensive and humongous. A culture of celebrating birthday parties, marriages and festivals, of course election meetings and even mourning  deaths with liquor has become widespread. It is not uncommon to see school and college students holding booze parties in five star hotels.

 Kerala, which has been accounting for the highest levels of per capita liquor consumption, has announced the return to prohibition. Maharashtra Chief Minister Fadnavis has  pointed to his interest in this. Gujarat, Mizoram, Lakshadweep and Nagaland are the few states where prohibition has been in force.

 It is not easy though. While enforcement will demand great attention, revenue loss can be mitigated by better targeting of the numerous subsidies to the most needy sections. The NDA government has succeeded in reducing the outgo on LPG subsidy by fixing a limit and by direct cash transfer. The state should adopt such an approach. Surely this would serve a larger social good.


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