TAMIL NADU

Deep-rooted connections

ARRACK WAS banned in Kerala in 1996. The ban was imposed as part of the then Antony Government's attempts to redraw the socio-political equations and break the vice-like grip the liquor lobby had on the State's politics. Seven years later, the arrack ban continues to be in force, but the liquor lobby is still around. This is because the liquor trade has its roots in the State's caste and communal politics. Only arrack is banned; toddy and Indian-Made Foreign Liquor (IMFL) are freely available. There are around 4,300 toddy shops, 150 bars selling IMFL, and 300-odd IMFL retail outlets. Toddy shops and IMFL bars are licensed out to individuals on an annual basis, while wholesale and retailing of IMFL is under the control of the State Government-owned Kerala State Beverages Corporation (KSBC).

Influential elements of Kerala's backward class Ezhava community have a major stake in the toddy business while a majority of the IMFL bars are in the hands of Christian entrepreneurs.

It was during A.K. Antony's brief term as Chief Minister in 1996 that the first real attempt was made to break the pervasive influence of the liquor lobby. There was no doubt that the arrack ban was a social reform that had come to stay. The LDF, which came to power, did not withdraw the ban it had opposed at the time of its introduction. However, toddy shops, which used to go for just about Rs.25 crores in annual excise auctions, suddenly went for a stupendous Rs.150 crores. This brought in extra cash for the exchequer no doubt, but generated a parallel economy. The lobby would have grown deep roots, but for the spate of hooch tragedies and the exposure of the illicit nexus between liquor traders, politicians and officials. The Judicial Commission presided over by Justice Mohan Kumar exposed this nexus.

Following this, the LDF Government handed over toddy retailing to toddy workers' cooperatives. It also brought IMFL retailing under the purview of the KSBC, which was only involved in IMFL wholesale till then. In the 2001 Assembly elections, the UDF rode to power with a massive majority on the basis of a unique combination of caste and communal equations.

The UDF liaison committee, which debated and discussed the policy in detail, decided to dismantle the toddy workers cooperatives, which were dominated by pro-Left unions. It decided to go in for licensing of toddy shops to individuals from April 2002, but not before a commitment to anti-liquor protagonists, who had opposed the return of the ubiquitous liquor baron, that the number of toddy shops would be progressively reduced over the years. As part of its attempt to please the anti-liquor activists, the State Government declared that the first of every month would be dry. The licensing system is not flawless because it still allows the old liquor lobby to make a back-door entry through benami ownership of toddy shops, which fetched Rs.30 crores as licence fee during the current financial year.

The retailing of IMFL through bars has been continuing without much change, though their licensing fee has been raised frequently. The State Government's presence in retail and wholesale IMFL trade has prevented the proliferation of spurious brands, though some of the liquor varieties known as "seconds" have been pushed through bar counters.

The flow of illicit arrack from across the borders continues unabated and the State Excise Department is woefully ill-equipped to tackle this. The only consolation is that the illicit trade is not a recipient of political support, with the Chief Minister, who holds the Home portfolio, and the Finance Minister, K. Sankaranarayanan, who holds the excise portfolio, acting at times in unison to tackle illicit arrack.

As far as the Antony Government is concerned, its liquor policy is part of an exercise to maintain the communal balance of a coalition, in which minority communities have a major stake. The licensing system was introduced as a via media to please influential sections of the Ezhava community, by offering a level-playing field for all, and, at the same time, to prevent the return of the powerful liquor barons.

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