Bihar should withdraw alcohol ban as it failed to curb crimes against women: Report

A new report suggests Bihar should reconsider its long-standing alcohol ban, citing evidence that the policy has not reduced crimes against women and has instead led to an increase in illicit liquor trade and other related issues. The findings come from a research paper published by the National Council of Applied Economic Research (NCAER), which analyzed the economic and social impacts of Bihar’s prohibition, introduced in April 2016. The report argues that the ban has failed to achieve its stated goals and has imposed significant financial burdens on the state. The NCAER study, prepared by a team of economists led by Ratna Sahay and presented at the India Policy Forum, highlights several key points regarding the effects of Bihar’s prohibition. One of the main motivations behind the ban was the belief that alcohol consumption contributed to domestic violence and that families would reallocate funds previously used for alcohol purchases toward more productive purposes. Women’s rights organizations and activists supported the measure, expecting it to curtail alcohol-related abuse. However, the report states that available data shows no decline in reported crimes against women since the implementation of the ban. In fact, the number of such incidents has risen during the post-2016 period. According to the NCAER researchers, the prohibition has coincided with an expansion of illicit liquor networks, challenges in enforcement, and instances of corruption. The report notes a significant increase in the illegal trade of alcohol, which has resulted in higher overall consumption, greater criminal activity, and a surge in the use of alternative substances, including illicit drugs. These developments have raised concerns about the unintended consequences of the ban, particularly in terms of public safety and health. The financial implications of the prohibition are also substantial. Prior to the ban, excise duties on alcohol constituted approximately 14 percent of Bihar’s own revenues in the three years before 2016. Following the implementation of the prohibition, the state faced a loss of this critical revenue stream. Additionally, the government incurred increased expenses related to monitoring, enforcement, and anti-smuggling efforts, adding to fiscal pressures. The researchers suggest that reinstating liquor excise duties to their previous levels could potentially restore the tax’s contribution to state revenues to around 14 percent, while simultaneously reducing expenditures on enforcement and anti-smuggling operations. Beyond the issue of prohibition, the NCAER report identifies several priority areas for Bihar’s development strategy. These include improving education, healthcare, governance, law and order, flood mitigation, private sector growth, and women’s empowerment. The study emphasizes the need for comprehensive reforms in these sectors to enhance productivity, drive structural transformation, and generate quality employment opportunities for Bihar’s youthful population. The report also examines the state’s public debt and fiscal sustainability, assessing the funding requirements for various reform scenarios. It recommends a multifaceted approach involving stronger revenue generation, more efficient public spending, increased central government support, and, when necessary, further borrowing. The findings of the NCAER report underscore the complex interplay between policy decisions and their broader societal and economic ramifications. As Bihar continues to grapple with the challenges posed by its alcohol ban, the call for a reassessment of this policy gains momentum, highlighting the need for a balanced approach that considers both immediate and long-term impacts on public welfare and state finances.