Protests demanding total prohibition in Tamil Nadu are intensifying ahead of assembly elections, but the state depends on liquor for a large part of its revenues
Shivani Chaturvedi | October 1, 2015 | Chennai
Since the age of 16, Kavitha has been fighting a tough battle. She is now 39, but the war does not seem to end any soon. Her fight is against the production and sale of untreated alcohol, in Tamil Nadu, that started ruining the lives of her family members. “For 23 years, I have been married to an alcoholic. I am watching my husband drinking himself into a slow death,” says Kavitha, a resident of Mullimanagar, a fishing hamlet along the Marina beach in Chennai.
“Heavy drinking has affected his liver and kidney badly. After spending six weeks in a rehabilitation centre, doctors assured that he would not touch alcohol again. But for the past one week, he has been drinking day in and day out. He cannot walk now and is left bedridden,” says Kavitha, teary-eyed.
But things turn worse as the state’s alcohol problem has also caught her 17-year-old son in the addiction web. Her daughter, who was pursuing a master’s degree in biology, had to discontinue her course as the drinking habit of her father and brother wreaked havoc on her studies. Kavitha, who now runs her family, was once seriously injured in the stomach after she was beaten by her husband. “We (women) work hard to make ends meet. But they (men) sell even our thali (mangalsutra) to buy liquor.”
Another resident of Mullimanagar, Sangeetha, who is in her late twenties, says, “I married a lovable man and thought we were destined to live happily ever after, until his alcoholism nearly tore us apart. My husband’s drinking habit has affected my chances of conceiving.” And for 61-year-old Kumudha, even two marriages could not bring peace. Her first husband, in an inebriated state, committed suicide 30 years ago. When Kumudha remarried, her second husband too was unable to stay away from alcohol. “I am in my second marriage and my husband drinks all the time. Because of this, my daughter is born with a psychological problem. I lost my elder son at a young age as he too used to drink a lot,” she says.
Children and adolescents in 10-15 years of age group, in school uniforms, are found drunk on the streets. But these women, who are seeing their family members die at a young age, are not just sitting like miserable wretches, crying all the time. They have been protesting for more than a decade now and have intensified their agitation this year. Kavitha, Sangeetha and Kumudha, along with 62 other women of the hamlet that houses 400 families, held a protest last month in front of one of the Tamil Nadu State Marketing Corporation (TASMAC) shops in the city. “While we were driven away by the police, a number of TASMAC shop visitors got privileged police protection in wake of the attacks over the past few days,” says Lakshmi, who participated in the protest. In August, a TASMAC liquor outlet in Chennai was torched by some miscreants, leaving an employee injured.
Tamil Nadu has witnessed a series of protests since July this year, with a demand for total prohibition – complete ban on sale of liquor – in the state. The agitation gained momentum after the sudden death of 59-year-old Gandhian and anti-liquor activist, Sasi Perumal, in the midst of a protest that called for the shutdown of a TASMAC shop in Kanyakumari. Perumal was running a campaign for close to three decades. After the incident, there was no looking back for the protestors. Across Tamil Nadu, there have been protests by various sections of the society, including student activists and differently-abled persons.
The prohibition debate has a long history in the state. But as the discussion is reaching a crescendo, this issue could gain voice in the coming assembly elections. Over two decades after arrack and countrymade liquor was banned by the government, the public started debating over complete prohibition. When videos of kids being forced to drink liquor began making rounds on social media, anti-liquor campaigners took up the cause afresh.
It is not just the civil society, but almost all political parties have raised the need for prohibition. Regional parties like S Ramadoss’s Pattali Makkal Katchi (PMK), Vijayakanth’s Desiya Murpokku Dravida Kazhagam (DMDK), Vaiko’s Marumalarchi Dravida Munnetra Kazhagam (MDMK), and BJP have either called for prohibition or protested against the liquor business carried out by TASMAC, the licensed authority in the state to sell liquor. But for the 31-year-old protestor Kalvimathi, mere lip service would not suffice. “None of the political parties want to solve the problem. We are not going to vote for any political party unless prohibition is brought before elections,” she says.
TASMAC, which has a monopoly over liquor distribution in Tamil Nadu, has witnessed a steady increase in its sales revenue since 2003. According to Satta Panchayat Iyakkam (SPI), an organisation working towards prohibition, 31 percent of the total revenue in the state comes from TASMAC. “For the year 2015-16, tax revenue from liquor sale to the government is estimated over '29,672 crore while the total revenue (the state’s own tax revenue) is '96,083 crore,” Senthil Arumugam, general secretary of SPI, told Governance Now. In 2003, tax revenue from liquor sale was '3,639 crore, he adds.
The sale of liquor has always been a steady and dependable source of income for the government. It is well understood that most of the freebies and populist schemes of the government are funded through the huge profits made from TASMAC. Some DMK heavyweights and leaders close to the ruling AIADMK are also active in the liquor business. According to the RTI data obtained by SPI, most of the distilleries operating in Tamil Nadu are either controlled or run by people close to political big-wigs.
Such a scenario raises serious doubts over the credibility of DMK in demanding proper implementation of prohibition on sale of liquor. Though it is the main opposition party, DMK is floundering after its worst performance in two decades. With the party’s core support being dwindled, DMK supremo M Karunanidhi is hoping to capitalise on his prohibition promise in the 2016 assembly elections. Such attempts are, however, not new for DMK. In 1971, Karunanidhi had lifted the ban on prohibition, only to reintroduce it in 1974. Later, till 1991, prohibition was enforced and repealed several times, after which the state banned arrack and countrymade liquor. As of now, the ruling AIADMK is silent on the issue but political analysts feel that Jayalalithaa could come up with an unpredictable move ahead of the assembly elections.
“People are well aware that both the Dravidian parties – AIADMK and DMK – have reaped lots of benefits from liquor trade,” says professor Ramu Manivannan, head of the department, political science, Madras university. But for Manivannan, it is not just the issue of prohibition. The larger concern is the effectiveness of the liquor policy in Tamil Nadu. “There has been boundless greed of the government to earn revenue through liquor sales. Currently, the liquor policy is not at all working in terms of social issues. If selling liquor is the only source of revenue for the government, then it should find out more effective ways of revenue collection,” he adds.
Is total prohibition feasible in TN?
R Srinivasan, who teaches at the department of econometrics at Madras university, says that political, budgetary and economic constraints may work against a total ban on liquor in the state. In an article written in the Times of India, Srinivasan brings out that for the Tamil Nadu government, monopolisation of liquor trade is a cost-effective way to collect huge tax revenue. This is why the trade was expanded by the state, with the total liquor consumption often increasing by more than 30 percent a year in the last decade. He further writes that two implications could be inferred from the estimate that more than 30 percent of the state’s own tax revenue is being collected from a single commodity like liquor. Firstly, if prohibition is brought in the state, the government will lose 30 percent of its own tax revenue at one go. And secondly, if the state government is collecting 30 percent of its tax revenue with such ease, it may be possible that it is not collecting other tax revenues to the fullest.
Srinivasan supports his theories by pointing at the tax-GDP ratios of other states. In the last three years, the tax-GDP ratio of Maharashtra has been around 15 percent, much higher than Tamil Nadu’s 11 percent. If one removes the liquor tax, the non-liquor tax-GDP ratio in Tamil Nadu is below 8 percent, which is far less than the 13-14 percent of Maharashtra. He also draws a comparison with Gujarat, which with total prohibition has a tax-GDP ratio of more than 8 percent. Both Gujarat and Maharashtra are comparable with Tamil Nadu in terms of urbanisation and non-farm sector contribution to a state’s income. Thus, it is normal to expect Tamil Nadu’s non-liquor tax-GDP ratio to be equivalent to that of the other two states. That, however, is not the case. Thus, it may be inferred that there is laxity in collecting non-liquor tax in Tamil Nadu, analyses Srinivasan.
He further adds that the liquor industry (including TASMAC owned liquor shops and distribution outlets, eateries attached to bars and liquor producing firms) employs more than one lakh people in Tamil Nadu. So it may not be politically feasible to discuss implementation of prohibition without removing the fear of retrenchment in this large industry.
Talking to Governance Now, Srinivasan says that in order to make prohibition work, depoliticisation of the sector is needed first. “Whenever a sector is regulated by law, and the regulator is an arm of the government, then violating the regulation requires political power. Hence, you find politicians being involved directly or indirectly, from production to distribution of liquor, and they regulate the market to protect the monopoly of such enterprises. How to depoliticise the sector? First, make the market to work under an autonomous regulator like TRAI for telecom. Second, all the production and distribution channels should be privatised with strict regulation on distribution and consumption. Third, all states should bring both excise duty and sales tax within GST, so that we create a national market for production and at the same time, the revenue of the state is not compromised. Fourth, tax on liquor is one of the instruments to dissuade people from consuming liquor, just like regulation. So it should be used effectively, and not by unmindfully increasing in tax rates on liquor.”
Numbers tell the socio-economic impact
A team of researchers led by Jayaram Venkatesan and Ajay Kumar Tannirkulam of Magasool Trust, an organisation working for farmers, carried out a survey on the effect of TASMAC in the day-to-day lives of people in Tamil Nadu. The researchers visited over 1,150 houses in five districts – Cuddalore, Trichy, Kanchipuram, Dindigul and Chennai – and compiled a report – ‘TASMAC the disaster of Tamil Nadu’.
“The idea of the survey was to understand the socio-economic problems that arise because of liquor. Unfortunately, none of the academic institutions had carried out any study on the impact of liquor on people of Tamil Nadu. Moreover, as our organisation is working for farmers, we were witnessing farmers and farm labourers spending their hard earned money on liquor and becoming addicted to it. This prompted us to carry out the survey,” says Venkatesan.
The survey was carried out in both rural and urban areas of the five districts. It covered 1,200 persons, half of them women, over a period of two years. The survey estimated that 70 lakh men in Tamil Nadu are alcoholics who consume liquor on a daily basis, and that 92 percent of the population favoured closure of TASMAC shops. Extrapolating the findings of the survey, Venkatesan says another 22 lakh consume alcohol three to four days a week. As many as 83 percent of the women surveyed said their husbands were consuming more alcohol over the past 10 years. Another key finding was that men living within one km radius from liquor outlets tend to become regular drinkers.
According to the survey, 84 percent of the regular drinkers resorted to verbal abuse and 64 percent were wife beaters.
While the revenue from liquor sale was pegged at '25,000 crore per annum, the researchers estimated that public spending on alcohol, including wage loss and money spent in hospitals, was more than double to what the government earned as revenue. It was found that people who drink daily spend '6,552 per month on alcohol. Extrapolating this figure for the whole of Tamil Nadu, then one may come to the conclusion that people spend close to '44,000 crore on alcohol per year. In the survey, 34 percent of the women also said that their husband, on an average, lost 14 man-days per month to alcohol. Calculating this for the entire year for people who drink, this alone entails a loss of '20,500 crores for families. “Total economic losses for people of Tamil Nadu amount to '67,444 crores per year. Compare this with the revenue that government gets, which is close to 25,000 per year,” says Venkatesan. He adds that overall, TASMAC has been a disaster and created huge socio-economic impact on families. “The government should to immediately start phasing out the shops,” he suggests.
Spurious liquor deaths
Tamil Nadu is known for many hooch tragedies, one occurred as recently in 2002. Earlier, two major liquor tragedies have occurred, one in 1975 and another in 1976. As per the data on spurious/illicit liquor deaths from national crime records bureau (NCRB), Tamil Nadu has witnessed 1,509 deaths from 2005 to 2014. In the same time period, Karnataka witnessed 1,421 deaths, while a total of 1,364 deaths were reported in Punjab and 843 in Gujarat.
Subathra Devi, an anti-liquor campaigner working with Friends for Alcohol Awareness in Chennai, says, “We can achieve any outcome provided certain ecosystem is built before bringing in prohibition. Only then prohibition can succeed. Prior to 1933, the US tried bringing prohibition but it didn’t work.” She adds, “It is too serious a problem to be left to politicians and bureaucrats. Five villages in Tamil Nadu (in districts including Madurai, Sivagangai, Dharmapuri, Villupuram) are 100 percent alcohol-free because of awareness and peoples’ participation. So taking this as a model, we are stressing on awareness.”
Inamul Hasan, coordinator, People’s Movements Against Liquor and Drugs (PMALD), who was part of a 100-day anti-liquor youth walk organised from Kanyakumari to Chennai last year, says, “We strongly believe that total prohibition can be possible only when people in large numbers participate in the process. PMALD has decided to strengthen the district level co-ordination team for anti-alcohol protest and to organise a state level conference and a mass padyatra by mobilising 10,000 people all over Tamil Nadu by the end of this year. The protest would intensify in the days to come as the state is going to polls next year.”
(The story appears in the September 16-30, 2015 issue)
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