A study by a leading research think tank has recommended that Bihar end its prohibition on liquor, citing significant revenue losses and arguing that the ban has failed to achieve one of its key objectives, reducing crimes against women.
The study by the National Council of Applied Economic Research (NCAER) was conducted as Bihar marked 10 years of complete prohibition on alcohol sales. The findings were presented at the India Policy Forum last week.
The study recommended that the Bihar government lift the complete ban on liquor and instead regulate its sale. Former Chief Minister Nitish Kumar introduced prohibition to reduce crimes against women, among other objectives. However, according to the study, the policy has not achieved that goal even a decade after its implementation.
What the study says
The study, titled “Macro perspective of Bihar’s development achievements: Unfinished agenda and the way forward”, was conducted by a group of economists led by Ratna Sahay.
It said an illicit alcohol market has grown rapidly in the state, alongside increased consumption of alternative intoxicants.
“Legal drinking was replaced by an increase in liquor trade, bootlegging, and higher consumption of alternative intoxicants,” The Indian Express quoted the study as saying.
The study also estimated that Bihar loses around 14% to 15% of its revenue each year due to prohibition.
It recommended a return to regulated liquor sales along with the introduction of excise duties.
“Reinstating excise duty would free up significant enforcement resources while providing crucial tax revenue needed for priority sectors like education, health, infrastructure, and genuine job creation,” the report said, according to The Indian Express.
What opposition says
The findings are likely to give the opposition political ammunition to argue that the BJP-led Bihar government has failed to implement prohibition effectively.
Subodh Kumar Mehta, the party’s national spokesperson, told The Indian Express, “All political parties had unanimously implemented the liquor ban in the state. We are still in favour of the ban. The study shows the government’s utter failure. It is not only about annual revenue loss, but the creation of a parallel black liquor economy.”
He added that reports like this could indicate that the state government may eventually seek to modify or partially lift the prohibition.
What BJP’s allies are saying
The JD(U), the BJP’s key ally in Bihar, is officially in favour of continuing prohibition. However, a party leader from Sitamarhi told The Indian Express that the policy needs to be reviewed, saying, “Liquor ban has not succeeded anywhere.”
Union minister Chirag Paswan, who heads another BJP ally, the Lok Janshakti Party (Ram Vilas), also opposed lifting the ban outright.
“It is true that we have to find ways to boost revenue, but it does not mean that we should lift the liquor ban,” Paswan told the publication.
Another Union minister, Jitan Ram Manjhi, told The Indian Express, “Bihar should follow the Gujarat model of stricter implementation of prohibition.”
With senior leaders of all three key allies showing little interest in ending prohibition, the BJP-led government could find it difficult to reverse the policy despite the potential revenue gains.
The coalition may also be wary of losing support among women voters, many of whom have historically backed Nitish Kumar’s prohibition policy.
On Tuesday, senior JD(U) leader and MLC Neeraj Kumar told PTI, “There is no question of review of the prohibition law which was implemented during the tenure of our leader Nitish Kumar.”
He added that the prohibition law had brought “significant changes” to the lives of rural women and said the policy had also been appreciated by Prime Minister Narendra Modi.
