Prohibition Economics

Prohibition Economics:

Prohibition Economics is an illusion. Prohibition never works, be it the economy or the society. A ban of commodity like liquor never works in country like India because of weak laws prevailing in the country. There should be stronger laws to make the ban effective. Many states in India banned Liquor at various time frames, but none of the bans was beneficial neither to the Society nor to economy.

Prohibition brings about an illicit black market which results in loss of revenue for the government. So Instead of Prohibiting, many things can be legalized so that it everything thing is in a balance. For instance Betting is prohibited in India, it can be legalized.  We know cricket is very popular sport in India. Whenever there is match in which India plays there is huge amount of online and offline illegal betting that takes place. This illegal betting has given rise to mix-fixing in cricket.  As a result of the match fixing the image of cricket as sport has impacted severely.  This could have been avoided or reduced to large extent if betting was legalized.

If we go back in time, past events tells us that prohibition has always been bad not for the economy but also for the society. In 1920s, there was a prohibition in US where consumption, transportation and sale of alcohol were illegal. The prohibition was done to reduce the crime, but prohibition had negative effects on the society.  The prohibition increased the crime.

The Prohibition also impacted the revenue and economy. Many employees who were working on breweries, distilleries lost their jobs.  The major source of income for the government was from liquor taxes. It was estimated that the government lost billions of revenue because of this prohibition.

Gujarat, in 2009 passed legislation on the Liquor Ban. The effects of ban are similar to the 1920s Ban in USA. The interstate smuggling of alcohol from neighbouring state has increased. Since there is a demand for liquor due to the ban, people buy the liquor at very high price. The ban has created a black market for liquor instead prohibiting it.

The prohibition of alcohol had impacted Gujarat in many other areas like Tourism. Statistics shows that number of foreign tourists to Gujarat has considerably decreased to the ban of liquor being served in the country. This has led to loss in revenue and unemployment increased as many people lost their job. Due to the Ban, Gujarat government lost revenues as the amount of liquor taxes fell drastically.