Dry States And Their Current Dryness
BUSINESS ECONOMICS|August 16 - 31, 2018

Indian alcohol stands as the second, third or fourth largest revenue generator in different states in terms of contribution to a state’s coffer.

Anwesha Chowdhury

According to the World Health Organisation (WHO), 30% of the Indian population drink alcohol on a regular basic out of which 11% of the people are heavy drinkers. The Organisation for Economic Cooperation and Development, 2015 report showed, alcoholism has increased at a rate of 55% between 1992 and 2012. Out of heavy revenue contributors, states like Kerala and Tamil Nadu hold a strong place when it comes to alcohol. In the 2012-2013 financial year, the total excise and commercial tax revenue of Kerala (IMFL and toddy) were ₹8,000 crore from alcohol; approximately 22% of the total government revenue. While India is holding the largest whisky market in the world, five states of the country have banned this totally. Gujarat, Nagaland, Mizoram and Manipur, officially prohibits drinking liquor, recently Bihar has been added in the list.

Legal perspective

About liquor ban, Article 47 of Indian constitution says, “The state shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.” But there is an exception; foreigners and NRIs can get a permit having a validity of 30 days.

Most of the people in India are not aware of the law. One of the reasons is that the law depends from a state to state. Alcohol law is included in the Seventh Schedule of the Constitution of India and comes under the state list. Therefore, the state can modify the alcohol laws according to their own wish. The states that define selling alcohol is illegal, are called as ‘Dry States’ in India. The sale and consumption of alcohol is banned and restricted in the following 6 states of India. The states are Bihar {Excise (Amendment) Bill 2016 Section 19(4)}, Gujarat {Bombay Prohibition (Gujarat Amendment) Bill, 2009},

Lakshadweep {Bombay Prohibition (Gujarat Amendment) Bill, 2009}, Manipur {(The Manipur Liquor Prohibition Act of 1991)} and Nagaland {(Nagaland Liquor Total Prohibition Act, 1989)}. Gujarat is the first state that comes with a death penalty for producers and sellers of home-made liquor.

Gujarat as a dry state

Gujarat is the first state in India that banned liquor consumption from 1961. On July 7th 2009, Gujarat law {Bombay Prohibition (Gujarat Amendment) Bill, 2009} prohibited anyone from storing, producing, selling and consuming alcoholic beverages.

The main reason behind alcohol ban in Gujarat was to pay homage to the father of the nation Mahatma Gandhi, who was born in Porbandar. Mahatma Gandhi was always against the idea of drinking alcohol and its consumption. October 2, his birthday is celebrated as a national dry day.

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