29% rise in Bihar entertainment tax collection

Has the alcohol ban imposed in 2016 turned Bihar into a land of milk and honey , and helped reduce crime rates? Two early studies commissioned by the state government seem to suggest so.A study by the Development Management Institute (DMI), Patna showed a 17.5% increase in the purchase of milk products in 2016-17 compared with a year before.For widely consumed milk products such as flavoured milk, Sudha special lassi and plain dahi, the increase was even higher. The total consumption of milk and milk products would be even higher if one were to include sales by private players.Sale of honey grew 380% while cheese rose 200%. The study also seems to indicate that drinkers have diverted their alcohol spends to consumer goods.For example, sale of expensive sarees rose 1,715%, expensive dress material rose 910%, and processed food grew 46%.There has been an increase of 29% in the collection of entertainment tax since prohibition was imposed in Bihar, according to a study commissioned by the state government.Armed with more purchasing power, households also pushed up sales of four-wheelers by 30%, tractors by 29% and two and three wheelers by 32%.Basing its calculations on 2011 consumption figures, the study showed there were 44 lakh alcoholics in the state when prohibition was announced.“Even by a conservative estimate, each of these drinkers have been spending at least Rs 1,000 per month on alcohol. On this basis, there was a saving of at least Rs 440 crore every month, which translates to Rs 5,280 crore per year,” the study said.This exercise was based on data collected from five districts: Nawada, Purbia, Samastipur, West Champaran and Kaimur. From each district, 2 blocks were chosen and from each block, 2 villages were selected which led to a sample of 20 villages. From these villages, 2,368 households were selected for the primary survey.The study on crime rates undertaken by the Patna-based Asian Development Research Institute showed an impact of the liquor ban on crime rates. The highest decrease was recorded for kidnapping for ransom (66.6%), followed by murder (28.3%) and dacoity (22.8%).The Nitish Kumar government had attracted criticism for its draconian prohibition law and for the loss of revenue from the exercise. Recent statements from the state leadership have indicated that there could be a review of the decision.However, the latest economic survey of Bihar, which published both studies, highlights the positive effects of prohibition. “Both the studies conclude that prohibition has come as a boon, especially for the economically vulnerable population in the society. It was first observed that crime rates have come down significantly in the post-prohibition period, bring substantial peace in the society.The money saved from drinking is now being spent on better consumption and comforts of life,” the economic survey of the state concludes.The Bihar government approved the Bihar Excise (Amendment) Act in April 2016, becoming the fourth state in the country to impose prohibition. The other three states are Gujarat, Nagaland and Lakshadweep.