The Prohibition Paradox: Balancing Public Health and State Revenue

Why in News?

Bihar's 2016 alcohol prohibition is in focus after the 'Macro Perspective of Bihar's Development Achievements, Unfinished Agenda, and the Way Forward' report presented at the India Policy Forum 2026 recommended lifting the ban, citing limited impact on violence against women and significant revenue losses.

The report's reliance on NCRB data is debatable, as rising reported crimes may reflect improved reporting rather than actual increase in violence. Moreover, rape cases declined or remained relatively stable after the ban, suggesting policy impact should be assessed using specific and causally relevant indicators.

Constitutional and Legal Framework

Article 47 (Directive Principles of State Policy)

• Mandates raising the level of nutrition and standard of living
• Directs State to improve public health as primary duty
• Crucially directs State to endeavor to bring about prohibition of intoxicating drinks and drugs injurious to health (except medicinal purposes)

Seventh Schedule - State List Entry 8

• Production, manufacture, possession, transport, purchase, and sale of intoxicating liquors falls under exclusive State Legislature jurisdiction
• Creates fragmented policy landscape with varying prohibition degrees across states

Judicial Stance on Liquor Trade

Key Regulatory Frameworks

• National Action Plan for Drug Demand Reduction (NAPDDR) 2021-22 under Nasha Mukta Bharat Abhiyan
• National Mental Health Policy (2014) - links alcohol to mental illness
• National Health Policy (2017) and National Suicide Prevention Strategy (2022)
• National Action Plan for NCDs (NMAP) 2017-2022 advocates for national alcohol policy

Alcohol Consumption in India: Current Scenario

Prevalence Statistics (NFHS-6, 2023-24)

• 18.9% of men consume alcohol
• 1.1% of women consume alcohol
• (Compared with 18.7% men and 1.3% women in NFHS-5)

Economic Burden

• 2.6 million DALYs (Disability-Adjusted Life Years) due to alcohol in 2021
• Rs 6.24 trillion estimated societal costs
• Per capita consumption rose by ~240% over two decades
• Nearly half of consumption remains unrecorded
• Alcohol costs India 1.45% of GDP annually (2019 study)
• Social costs exceed economic gains from excise taxes by more than 3 times

Key Drivers of Consumption

1. Biopsychosocial Factors: Genetic predisposition, brain reward system activation, stress, anxiety, peer pressure
2. Commercial Determinants: Surrogate advertising, influencer marketing, OTT content, attractive packaging, pre-mixed drinks
3. Easy Availability: Widespread retail, online delivery, low-cost IMIL (Indian Made Indian Liquor)

Arguments Regarding Alcohol Prohibition

Arguments in Favour of Prohibition

1. Mitigation of Gender-Based Violence

• Restricting alcohol access reduces intimate partner violence
• Bihar's quasi-experimental studies showed substantial decline in spousal violence
• Lancet Regional Health (2024): Bihar ban prevented over 21 lakh cases of violence

1. Redirection of Household Expenditure

• Behavioral economics: restricting alcohol limits "sunk costs"
• Discretionary income redirected toward child education, nutrition, durable assets

1. Public Health Benefits

• Reduced burden on healthcare (liver disease, cardiovascular ailments)
• Lancet study: Bihar ban prevented 18 lakh cases of overweight/obesity among men

1. Economic Costs Perspective

• Long-term gains from improved health, safety, productivity often overlooked
• Social costs are 3x the economic gains from excise taxes

Arguments Against Complete Prohibition

1. Rise of Parallel Economy

• Prohibition doesn't eliminate demand, pushes it to illegal markets
• Encourages liquor mafias, cross-border smuggling, corruption
• Bihar borders Nepal, UP, West Bengal, Jharkhand face smuggling challenges

1. Hooch Tragedies

• Shortage of regulated alcohol pushes consumers toward illicit liquor
• 2025 Punjab Amritsar hooch tragedy: 21 deaths from methanol-contaminated liquor
• Hooch causes mass poisoning, deaths, and permanent disabilities

1. Inequity in Enforcement

• Affluent consumers access smuggled liquor easily
• Lower-income groups face arrest for consumption or low-level supply
• Unequal burden on marginalized sections

1. Fiscal Impact

• Alcohol excise duties: 15-25% of total state tax revenue
• Loss cripples funding for infrastructure, welfare schemes, de-addiction programs
• Complex macroeconomic challenge for state planning

1. Burden on Judiciary and Prisons

• Stringent penal provisions cause mass incarceration
• Severely clogs judicial system
• Offenders often from marginalized sections

1. Limited Long-Term Effectiveness

• US Prohibition (1920-1933) and Haryana's 1990s ban failed
• Bans reduce consumption short-term but fail to eliminate demand long-term

Effective Alcohol Control Measures

1. 'Nudge' Theory Application

• Use behavioral economics instead of blanket bans
• Strict age-gating mechanisms
• Ban surrogate advertising
• Mandate graphic health warnings (like cigarettes)

2. Community-Led De-addiction

• Decentralize rehabilitation through grassroots institutions
• Empower Panchayati Raj Institutions (PRIs)
• Integrate women's Self-Help Groups (SHGs) (Kudumbashree model)
• Peer-led community counseling

3. Technological Intervention

• State-monopolized biometric-linked rationing system
• "Smart liquor cards" capping individual purchase volume
• Technology-based monitoring

4. Ring-Fencing Funds

• Statutorily hypothecate 20% of sin tax revenue
• Mandate reinvestment exclusively into:
• Psychiatric healthcare upgrades
• State-of-the-art de-addiction centers
• Nutritional schemes for women and children

5. Prioritize Rehabilitation over Criminalisation

• Treat alcohol dependence as public health issue, not criminal offense
• Strengthen de-addiction centers, counselling, mental-health services
• Community-based rehabilitation
• Target illegal supply networks through strict enforcement

Conclusion

True adherence to Article 47's constitutional ethos lies not in abrupt criminalization of a socio-medical issue, but in gradual, institutionally backed capacity building. Regulation, rather than prohibition, preserves state capital while progressively dismantling socio-economic harms of alcohol abuse.

Drishti Mains Question: Article 47 provides a constitutional basis for regulating intoxicating substances, but its implementation raises questions of State capacity, individual liberty and fiscal sustainability. Discuss.