Bihar liquor ban : The economic and political gains

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Ankur Thakur, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur


Nitish Kumar’s first big decision after coming to power has been of partial prohibition of country-liquor on April 1st, 2016. However, everyone was caught surprised when within 6 days, Bihar became a completely dry state like Gujarat with the ban extending to Indian made Foreign Liquor as well.

State government records also show that nearly 200 alcoholic patients have been admitted to government hospitals, and 1,300 been treated without admission since April 1. The common symptoms of alcohol withdrawal include anxiety, depression, fatigue, insomnia, nausea and vomiting, and sweating. The Bihar government did consult public health experts, but only for their technical knowledge on how the ban can be enforced and how de-addiction centers could be set up. It did not ask them whether the ban was feasible to begin with, and whether the state health machinery could handle patients coming to them with withdrawal symptoms.

A de-addiction center was established in each district hospital complete with air conditioning, television, CCTV and even carom boards for patients to play with. Bihar also recruited counsellors, and placed a drug inspector at each center to ensure there was no shortage of drugs. But despite all the preparations, nobody had prepared for a total ban. All the training too was done keeping in mind that it was a partial ban. Hence this caught everyone short on arrangements.

Legal consumption of alcohol did rise in Bihar during Kumar’s tenure. It is estimated that between 2005 and 2015, the number of alcohol shops doubled in Bihar. In 2006, Kumar established the Bihar State Beverages Corporation to provide suppliers remunerative prices, make liquor available at reasonable prices, maintain buffer stock and intervene in the market for price stabilization.

But does Bihar really have an alcohol problem? The data from the National Sample Survey Organization suggest otherwise. According to it, people in Bihar spend very little on alcohol. The per capita expenditure on alcohol is around Rs. 15.50 a month in the state, which is below undivided Andhra Pradesh (Rs. 173), Kerala (Rs. 80.85), and Punjab (around Rs. 72). The all-India average is around Rs. 35 – more than double of Bihar’s share.

The ban may be bad economics with uncertain social results, but it is smart politics. Nitish Kumar received a lot of votes from women in the recent elections to the Bihar legislative assembly, and he clearly wants to consolidate this vote bank.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s