TL;DR

No, he can’t! The Indian Constitution doesn’t have a provision for him to ban alcohol overnight, thankfully. Yes, he can try to amend the constitution to acquire the right, but this will be challenged by Indian States, for whom from liquor sales are a big revenue stream. The resulting dispute will reach the Supreme Court, who will likely side with the states. I detail why below. Finally ,my essay concludes by detailing past attempts at introducing prohibition in India that have come a cropper.

This is of course the TL;DR version, but I hope you will read the long version below. It is a tad long, but well this is a complex question, and I wanted to make sure I did full justice to it. That said, it is a lot of fun to read (I think!) and has several interesting nuggets that you will find fascinating. Enjoy!

 

1. Twitter Wars

Every few months on twitter, usually in response to tweets such as the above, I find myself arguing over the possibility of India introducing alcohol prohibition. My fellow argumentators are convinced that India will soon be a (alcohol) dry state; in fact one of them, a prominent British journalist has a 10/1 bet that Indian will go dry by 2020. He and others base their views on a combination of factors, such as the creeping conservatism in India’s political landscape, the emergence of prohibition as an electoral issue in many states (Bihar, Kerala etc.[1]) and the Indian Prime Minister’s penchant for dramatic announcements.

I too see the same signs as they do, but I also see these in the light of many past signs and events. They tell me a rather different story; one where several attempts at national prohibition were made, some genuine and some insincere, but all ending up in failure. Then there is the matter of the individual states’ rights to regulate alcohol, and exclusive access to taxes on it, a right enshrined in the constitution. It is the above that led me to argue that nationwide prohibition is unlikely to ever occur in India. However, as with most arguments on twitter, the result was inconclusive. 280 characters make it difficult to set up anything irrefutable. Hence this essay, where I hope to build a persuasive case for why national prohibition is unlikely to make any headway in India.

We will begin by examining whether our dear Prime Minister can indeed declare prohibition overnight, akin to his demonetization of Rs 500/- and Rs 1,000/- currency notes. The answer, thankfully is no, and we will examine why it is so. We then explore how a determined Prime Minister can indeed work his way towards national prohibition. And, this is the key part, we will understand why his attempts are bound to end up in failure, thanks to the Supreme Court. And we will also learn why it is not the Supreme Court’s liberal instincts that we should likely thank for this, but rather a fortunate chain of events starting almost 100 years ago, which gave Indian states the exclusive rights to regulate and tax alcohol, leaving them sloshed on the rich vein of revenues from alcohol; a revenue source on which they are too drunk now, to give up.

2. How the Prime Minister can theoretically impose prohibition

It is important to note that there is no provision in the Indian Constitution that allows the Prime Minister to declare prohibition overnight. For unlike the regulation of currency, which comes under the Union List[2], alcohol is a state subject. It comes under the State List[3] which means only the legislatures of the 29 states have the exclusive power to make laws on it, applicable within its own boundaries. So long as alcohol remains on the State List, the Union, or rather the government in power at the centre cannot ban alcohol across India. Yes, it could instruct the Chief Ministers of the states it is in power to ban alcohol overnight. But that leaves the remaining states where alcohol can be consumed freely, and as we will see soon, a whole host of problems, not the least of which is smuggling of liquor from ‘wet’ states to these new ‘dry’ states. More on that soon.

What about a nationwide ban on alcohol? Is it possible theoretically? If so, how could the central government go about imposing prohibition? Well, given that the constitution doesn’t permit the union to regulate alcohol, the (central) government would need to follow a two-step process. The immediate step would be to amend the constitution and move alcohol out of the State List to the Union List. Such an amendment would need a bill to be passed in each house, approved by a majority of the members of the house, with at least 2/3rds of the members present and voting. Given that this amendment impacts state powers, the bill must also be ratified by the state legislatures of at least 15 states (not less than half of the total 29 states). Is this possible today?

The answer is a clear yes. The BJP has a majority in the Lok Sabha and rules over 15 states. It doesn’t yet have the requisite numbers in the Rajya Sabha but a cause such as prohibition can create a set of backers. So if it decides to go for it, I dare say it can pull it off. (It is a different matter that none of the BJP-ruled states, including Uttar Pradesh, which has a mahant as its Chief Minister, has attempted to reduce availability of liquor). Following the transfer of alcohol to the Union List, the government can then issue an executive order for liquor to be prohibited overnight.

However, the process of transferring alcohol to the Union List will not be easy; in fact, it is unlikely if they will ever be able to pull this off. For the states will certainly be reluctant to give up their rights to tax alcohol, given that it constitutes as much as 25-30% of their own tax revenues (see Table A below), and is an easy source of cash funds for elections and other party activities. The amendment to transfer regulation of alcohol to the Union List will certainly see a legal challenge from the states, one very quickly making its way to the Supreme Court, as this will become a constitutional flashpoint of sorts. If it does reach the Supreme Court, how might the bench evaluate the case and this amendment?

Table A: How much tax do states make from alcohol?

 

 

 

 

 

 

 

 

 

3. How will the Supreme Court decide?

In deciding the case, the Supreme Court is essentially deciding who has the competency to regulate alcohol – the centre or the states? In determining this competency, it will view this question through the lens of two key legal concepts.[4] The first concept is what I refer to as established precedence, i.e., including not only the accepted custom and practice but also the constitutional history underpinning the practice. The second is the doctrine of proportionality. Let us view these from the perspective of the Supreme Court, beginning with the concept of precedence.

Alcohol has been under the jurisdiction of Indian states since 1877, an arrangement formalized in 1919 by the Montagu-Chelmsford Reform, and subsequently written into the Government of India Act 1919, which decreed that taxation and regulation of alcohol is for the individual provinces to decide[5]. This arrangement, and the overall broad division of fiscal powers between the centre and the states then became the broad template for Independent India as well. Thus, there is considerable precedence on the topic of state rights over alcohol.

In addition to past history and practice, the Supreme Court will also look at the intent of the drafters of the Constitution, as emerges from the debates around this topic in the Constituent Assembly during 1946-49, the years when the Constitution was being formalized. It is clear from the transcripts of the Constituent Assembly debates that there was no discussion whatsoever on the question of alcohol taxation being a state subject. For the past seven decades, alcohol had been a state issue, and the Constituent Assembly did not perhaps wish to revisit this precedence. However, this was a secondary topic. The key topic was how the Constituent Assembly viewed and debated the issue of whether the Indian Republic should have prohibition, which finally resulted in Article 47 of the Constitution.

Article 47 reads: “The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.” 

It is especially important to note that Article 47 is part of the Directive Principles of State Policy, which as Dr Ambedkar described, are “non-enforceable in courts of law”. By introducing the prohibition amendment under the Directive Principles, we know our founding fathers saw prohibition as an inspirational objective, one to be strived for. They did not see prohibition as a fait accompli, but rather one that would emerge out of the natural sentiments of the people. Dr Ambedkar refers to this in his statement closing the debate on prohibition, following the successful vote on the amendment clause: “Whether to act on this principle and when to do so are left to the State and to public opinion. Therefore, if the State thinks that the time has not come for introducing prohibition or that it might be introduced gradually or partially, under these Directive Principles it has full liberty to act.[6]”

As we see above, for our founding fathers, alcohol regulation and prohibition was clearly not the domain of the Union. To the extent they saw prohibition happening at all, and from the debates it is clear that they desired it, they saw it as a gradual state-by-state prohibition, not a top down decree from the Centre. The concept of a gradual or partial introduction of prohibition, as Dr Ambedkar alludes to, is thus a clear acknowledgement of the individual state’s sovereignty over regulation of alcohol.

This also explains to some extent why Jawaharlal Nehru’s Congress Party, which held more than 2/3rd majorities in Lok Sabha and Rajya Sabha through the 1950s, and had majorities across most of the State Assemblies, did not chose to push through prohibition, when they could well have done so easily. The mood in those days was far more amenable to prohibition. In fact by 1955, over a third (36%) of the country by area, and over a quarter (28%) of the country by population was under prohibition (See Graphic A below). With a slight push, India could well have gone dry. But Nehru and his party didn’t push, for the newly-minted Constitution had clearly assigned alcohol and prohibition to the states, and they clearly felt it was a fit topic for the states to deal with.

Graphic A: 1951 India map showing districts under prohibition

Grey colour indicates that the district is under prohibition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Strike two: the doctrine of proportionality

Let us move on to the other key legal principle that the Supreme Court is likely to apply – the doctrine of proportionality. Essentially, proportionality correlates the means with the end. It asks, are the means (prohibition) out of whack with the end goal (say, improving public health and standard of living of the people)? To enable this balance, proportionality recommends means that are helpful, necessary and appropriate to achieve the ends[7].

Let us explore how the Court will apply these principles. First the Court will ask if improving public health and standards of living is indeed the desire (as per Article 47), then to what extent will barring access to alcohol improve these two end goals? How helpful indeed is prohibition towards advancing to these goals? Is there compelling evidence that societies are able to progress towards these goals only when alcohol access is barred for the wider society? We do know that this isn’t entirely true – most countries where living standards and public health indicators have improved also have free access to alcohol. Thus clearly a ban on alcohol across society is not helpful to the end.

Next, the Supreme Court will ask if a countrywide ban is necessary: is there an alternate action with a lesser degree of limitation that can help us progress towards our goals? Say, restriction on certain classes of alcohol or higher alcohol prices or rationing. Clearly such actions may be more helpful towards improving public health and standards of life, accompanied by lower limitations on freedom. And lastly, it will ask if prohibition is appropriate, even if it is necessary, i.e., wont it cause more bad than good, wont the second order effects from nationwide prohibition – bootlegging, increased crime, loss of jobs etc. – cause more harm than gain?

Clearly the answers to these three questions – is it helpful, it is necessary and is it appropriate – indicate that nationwide prohibition is a disproportionate means to the desired ends. The Supreme Court is thus likely to concur that a piecemeal approach, fitting in with local standards and meeting regional aspirations and customs, is far more proportionate to meet the end goal. For such an approach, the Supreme Court may well find the existing practice of states regulating alcohol better suited.

Thus, on both grounds, proportionality as well as the earlier principle of precedence, the Supreme Court is likely to side with the States, rendering the hypothetical constitutional amendment invalid, and ensuring that alcohol remains in the State List. And if this happens, we know then there is no avenue for the central government to impose prohibition. But what about the states themselves? Is there a possibility that the states could declare prohibition sequentially, with the country steadily moving to national prohibition?

5. Could the states move one by one towards prohibition?

Historically, states neighbouring the one where prohibition has been imposed do their best to resist any similar moves. For prohibition in a neighbouring state is a revenue windfall for them. Most states have long borders with their neighbouring states, and there are several small roads that criss-cross these borders, not all of which can be policed all the time. The determined bootlegger can easily push his stock from the neighbouring state. Then there are liquor tourists from the state under prohibition, who will travel to their state for drinks. What this means is that that the demand for liquor doesn’t disappear when the state is under prohibition. It only moves to the neighbouring states.

Let us take the recent rather absolutist alcohol ban in Bihar. Thanks to the ban in Bihar, West Bengal recently saw its excise revenue jump by 66% from 5,200 crs in 2016-17 to 8,700 crs in 2017-18. Jharkhand saw a similar percentage jump, excise revenue rising from just under 1,000 crs in 2016-17 to 1,600 crs in ‘17-18. Uttar Pradesh’s (UP) excise growth at ~10% isn’t as dramatic; it is a fairly large state after all, and there are only 7 districts (out of 75) that border Bihar. Liquor sales in these border districts nearly doubled in the months following prohibition in Bihar.[8]

Graphic B: Jump in alcohol sales in UP’s border districts with Bihar

 

 

 

 

 

 

 

 

 

 

The above gives us a good idea of what could happen in a potential scenario where more and more states in India decide to impose prohibition. When your neighbouring state imposes prohibition, the less incentive you have to impose prohibition in your state, for a share of its excise revenue is going to flow automatically to you. Thus if say, half of the 29 states in India declare prohibition, the neighbouring ones will have all the incentive in the world to stay ‘wet’ and soak in the increased excise revenues that they will get. Especially given that for most states, the tax revenues from alcohol are already a substantial chunk (25-30% as per Table A) of their own tax revenue.

The implication of this is clear, and vital: Indian states will never be able to get to national prohibition via a sequential or domino approach, where they will adopt prohibition one after the other. Instead the ones who have gone ‘dry’ will likely ease prohibition when the lower tax revenues begin to bite, and when they see their neighbouring states taking advantage. This is why P. Siddaramiah, the current, and rather pragmatic, Chief Minister of Karnataka remarked when asked about the likelihood of prohibition in Karnataka: “Prohibition isn’t possible in India because there has to be a national consensus on the issue. I can support prohibition only if all states simultaneously take up the cause. It is practically not possible, as it will automatically encourage illicit liquor.[9]”

What does this mean then for the chances of national prohibition in India? The clear answer, and one that will come as a relief to all drinkers, is that national prohibition is unlikely to ever happen in India. Most states, barring those with severe electoral compulsions, have too much at stake to consider letting go of tax revenues from alcohol. And even if some do, the spike in revenues flowing to their neighbours will make them reconsider the decision eventually. And if the Union decides to muscle in on their rights, by attempting to pass a constitutional amendment, the courts are very likely to side with the states. The chances of national prohibition are thus, effectively zero.

6. “Those who forget history are condemned to repeat it”[10]

Today, for most urban Indians, the very idea that there could be national prohibition seems absurd. Voices espousing prohibition emerge from the fringes of national politics, typically in election seasons. They emerge and are quickly forgotten, but not before causing a smidgeon of fear. But in the 1950s and ‘60s, prohibition was a mainstream topic of discussion. Remember, over a quarter of the country including Bombay and Madras (and Delhi for some years) was under prohibition in those years. Most discussions revolved not around if prohibition would happen, but as to when.

In 1954, the powerful Planning Commission (headed by P.C. Mahalanobis, a Nehru favourite) appointed a Prohibition Enquiry Committee, known as the Shriman Narayan Committee, to evaluate the topic of prohibition comprehensively. The committee, which gave its report at the end of the year, suggested that the states set a deadline of 1 April 1958, as the date for starting national prohibition. To this end, the Lok Sabha also passed the following non-official resolution on 31 March 1956: “This House is of opinion that prohibition should be regarded as an integral part of the 2nd 5-Year Plan and recommends that the Planning Commission formulate the necessary programme to bring about nation-wide Prohibition speedily and effectively”.

Subsequently, after the states dragged their feet on this topic, the government appointed a 2nd committee, the Tekchand Committee, in 1964. The Tekchand Committee too set a deadline, this one by 1970. This deadline too passed. If anything, the 1960s were when many states such as Maharashtra, Andhra Pradesh revoked their existing prohibition laws. The last ‘attempt’ at nationwide prohibition was in 1977 when Morarji Desai came to power at the helm of the Janata government. He advocated total prohibition by 1981, and in deed a few states (Bihar, Rajasthan, Delhi etc.) did impose prohibition. Most resisted. The Janata government was voted out in 1980, and soon the spectre of prohibition had ended.

Since then, there have been no nationwide thrusts at prohibition. A few states — AP, Haryana, Mizoram, Nagaland, Manipur – attempted prohibition in the late ‘80s and 90s on the back of a mass movement led by women. All, barring Nagaland (and Manipur partially) eventually reversed their policies. In the case of Nagaland and Bihar, it really is a question of when the need for revenue will force them to do a U-turn on prohibition. When they do, they will join a long list of reversals on the prohibition front. We can see the entire list of these reversals in Table B below.

Table B: History of prohibition in Indian states

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7. Cheers!

Clearly, the prohibition wheel has now turned a full circle. If in the ‘50s it was a question of when the entire country would go dry, today it is only a question of when the country will go fully wet. Take Gujarat, which has had alcohol prohibition since its founding in 1960. In fact under Narendra Modi, the state eased prohibition for tourists and out of state visitors, with a view to boost tourism and trade. Now there is talk of introducing alcohol in the GIFT SEZ (Gujarat International Finance and Tec-City) located near Gandhinagar, in order to make the proposed financial hub competitive with its peers.

Drunk on revenues from alcohol, India’s states of slosh have kept national prohibition at bay thus far, and in all likelihood will continue to do so for the far future as well.

On that note, let us pour ourselves a stiff one!

***

Endnotes

[1] Total Prohibition has been enforced in Bihar since 1 April 2016. Kerala flirted with gradual prohibition, but is now seeing a reversal, and things are back to status quo. Madhya Pradesh, Chattisgarh and Jharkhand have announced their desire to introduce prohibition but none have moved in that direction. Presently India has prohibition in the territories of Bihar, Gujarat, Lakshadweep and Nagaland. There is partial prohibition in parts of Manipur, the district of Wardha in Maharashtra and some holy cities such as Tirupati, Haridwar etc.

[2] Item 36 in Union List of Schedule VII of the Constitution viz., “Currency, coinage and legal tender; foreign exchange.”

[3] Item 8 of the State List of Schedule VII of the Indian Consitution, viz., “Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.”

[4] This section, where I explore how a bench would deal with a hypothetical case, owes considerably to my discussions (a conversation and several email exchanges) with 3 leading constitutional scholars.

[5] In 1877, individual provinces such as Bombay, Bengal and Madras were made formally responsible for development of revenues from excise (along with other local revenues). The Chelmsford-Montagu Reforms of 1919 entrenched this arrangement formally, excise revenue now becoming a ‘transferred’ subject, firmly under the span of the provinces. This arrangement was institutionalized with the passing of the Government of India Act in 1919, which became the basis for the Government of India Act 1935, key parts of which, including items such as the division of regulatory powers over various items (such as currency under the centre, but excise under states) were carried over to the Constitution of independent India.

[6] Edited from Dr Ambedkar’s closing statement on prohibition amendment during the Constituent Assembly Debate on 24 November 1948, via https://indiankanoon.org/doc/1945234/

[7] Bernard Schlink, Proportionality In Constitutional Law: Why Everywhere But Here?, 22 Duke Journal of Comparative & International Law 291-302 (2012)
Available at: https://scholarship.law.duke.edu/djcil/vol22/iss2/5

[8] We know this thanks to an RTI application filed by journalist Rohan Abraham and published on his personal blog. From ‘Anatomy of a Dry State’, Rohan Abraham. https://social.shorthand.com/gershwin93/nyry3Qzg0e/anatomy-of-a-dry-state

[9] The Booze Ban, Sandeep Unnithan and Amitabh Srivastava, India Today 6 October 2016 https://www.indiatoday.in/magazine/the-big-story/story/20161017-bihar-nitish-kumar-prohibition-law-liquor-ban-narendra-modi-829699-2016-10-06

[10] A variant of a quote by George Santayana. The correct version is “Those who cannot remember the past are condemned to repeat it”.