Nitish Kumar must lift alcohol ban to rescue Bihar from low GST and corona crisis

Desperate times call for desperate measures. In this unprecedented health and economic crisis that India faces, the relationship between the Centre and the states, especially in the context of fiscal federalism, is being keenly watched. With the nationwide lockdown and the subsequent evaporation of the GST funds, the states are in a fix. A substantial portion of the state finances originates from the GST mop-up.

By virtue of being prosperous, states like Maharashtra and Kerala may still have a cushion, but for a poor state such as Bihar, the crisis is a body blow.

At a time when other states are raising revenue from liquor sales, Bihar doesn’t even have that option. Why? In case you forgot: Bihar is a dry state.

As the lockdown squeezes the state economy, there is a pressing need for the Bihar government to overturn the archaic liquor ban and strengthen the state financially.

Bihar has questions

Migrant labourers walking back to their homes will become the defining image of this pandemic. Migrant labourers do not exist in vacuum. More than 10 Lakh migrant labourers are set to return to Bihar in the wake of this crisis. Bihar, therefore, faces a peculiar challenge.

The pendulum approach of the Bihar government led by Nitish Kumar in handling the crisis must be openly discussed and questioned. Where have we gone wrong? What needs to be done? How does the Government of Bihar intend to engage the returning migrant labourers in meaningful employment? These are some of the concerns that need urgent attention.

Going beyond symbolic socialism

Bihar has been a classic example of figurative socialism where the political class in their mindless pursuance of power led to the total decimation of the state. In spite of having critical tourism spots of three major world religions in Bodhgaya (Buddhism), Patna Sahib (Sikhism) and Pavapuri (Jainism) and the remains of the world’s oldest university (Nalanda), the policymakers have shown almost no creative imagination in leveraging them in the interest of the state.

Chirashree Das Gupta in a paper titled Can Bihar Industrialize makes an important observation: “Industry accounts for only 3.2 per cent of the state domestic product in contrast to the national average of 20.1 per cent, making Bihar one of the least industrialized states in the country.”

Trade and tourism plays an important role in advancing the economy of any region and creating jobs. The migrant labourers returning to Bihar is an evidence of the lack of attention of the political leadership over the decades in developing support infrastructure for trade and tourism. In a report published by the NITI Aayog on Sustainable Development Goals (SDG), Bihar was at the bottom with Kerala topping the list. It is an exhaustive index that takes into account parameters of hunger, sanitation, basic infrastructure among others.

Shambolic ban on alcohol

A rethinking on the liquor ban in the state can be a good start. The state government has been losing in upward of Rs 4,000 crore annually since the alcohol ban in the state since 2016. A state with massive levels of unemployment could have done so much to provide job opportunities to its young citizens with this money. A person leaves his/her home and family only in a dire situation, but in Bihar it is a common practice.

Former press secretary and an eminent thinker Ashok Malik in one of his articles post the alcohol ban wrote about the death of 20 people in Gopalganj district of Bihar on account of consumption of “substandard and illicitly procured alcohol. Without the prohibition law, the men who died would have had access to country-made liquor made in safe conditions or Indian Made Foreign Liquor (IMFL) from a regular store. They would have survived and their families would not have been left wondering if the prohibition law was worth it.”

Liquor ban a bane

The already burdened judiciary in the state has to deal with the additional 200,000 prohibition related matters. The crime rate has also grown manifold contrary to the popular narrative that the ban has contributed towards peace and stability.

Noted thinker and former English professor Shankar Dutt of Patna University also pointed out that “All bans, I feel are an admission of the failure of governance. With the reports of domestic violence emerging out of the lockdown, it does not seem that the ban has worked for social good. Plus, the state is losing immense amount of revenue which it can ill- afford in an unprecedented crisis such as this.”

Liquidity injection through partial lifting of the ban on alcohol and subsequent elevated taxation can help boost the state’s depressed finances. The revenue can help in creation of sustainable job opportunities for the migrant labourers who have come back. The Bihar government should learn from the neighboring Uttar Pradesh government that is consistently working to transform the crisis into an opportunity by managing law and order through effective interventions in the bureaucracy. The  UP government, soon after the crisis was anticipated, set up a corona care fund of Rs 1,000 crore.

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