Changing faces of prohibition raj
"Yes, I am addicted to prohibition. Those who cannot do without drinking should go to some other place," Nitish Kumar had said on August 1 in a debate over the Bihar Prohibition and Excise Bill 2016 in the Assembly. The chief minister's "wish" is coming true; entrepreneurs are fleeing the state and businesses are bearing the brunt of the prevailing climate of fear.
- Published 7.08.16
Patna, Aug. 6: "Yes, I am addicted to prohibition. Those who cannot do without drinking should go to some other place," Nitish Kumar had said on August 1 in a debate over the Bihar Prohibition and Excise Bill 2016 in the Assembly. The chief minister's "wish" is coming true; entrepreneurs are fleeing the state and businesses are bearing the brunt of the prevailing climate of fear.
Patna-born Karan Gandhi (30), who did his higher studies from Pune, had set up Elite Marketing, which brought high-end drinks such as wine and champagne for the first time to Bihar early this year. He had to wind up his business after complete prohibition was clamped. Now, he has joined a real estate consultancy firm in Gurgaon.
Karan's family has been in the liquor business for the past 30 years, and he feared the cops might harass him.
"I did not want to live in a constant state of fear, so I have left Bihar," he told The Telegraph over phone from Gurgaon on Thursday. "I hold Nitish Kumar responsible for forcing me to leave my home state. I could have started another venture but business cannot be done in an environment of fear. The prohibition law is very harsh and has arbitrary provisions, and people who were earlier involved in liquor-related businesses are vulnerable to being harassed."
Karan pursued WSET level I, a one-year beginner's level introduction to wine for those wishing a career in the industry, and spent two years coordinating with the government to start his company only to wrap it up in a few weeks because of prohibition.
Karan is not alone. Sachchidanand Rai, chairman of the Eden Group that ran around 120 buses in Bihar over the past five years, said he had wound up the transport wing of his company in the state. Like Karan, Rai too said the prevailing scenario in Bihar is not conducive for doing business. He will use the funds retrieved after winding up the transport business in Bihar to set up new ventures in Bengal.
"Despite facing a lot of administrative hassles from the transport department in running our buses, we somehow survived over the past five years," Rai said. "The transport department used to delay issuance of permits for our buses and payment of subsidies as well. They have confiscated nine of our buses on false charges. So, we decided to stop operating buses in the state and Eden Transport Private Limited was shut down on May 26."
Initially after winding up the transport business, Rai thought of setting up either a new food-processing unit or a private university in Bihar.
"But the stringent prohibition regime has made it extremely difficult to run any business here," he said. "There was already no ease of doing business in Bihar and the stringent excise laws are acting as the last nail in the coffin. Thus, we have decided to shift to Bengal expecting better and supportive environment for doing business."
The hospitality sector, which was one of the mainstays of business in Bihar, has suffered badly over the past four months thanks to the prohibition frenzy. Room occupancy in hotels has plunged and corporate conferences have almost stopped.
"The food and beverages (F&B) segment has been affected by 30 to 35 per cent," said Pranav Kumar, general manager at The Panache hotel in Patna. "Corporate events like product launches and dealers' meets rarely happen now, which has had a direct impact on room occupancy and F&B. These events are now held in either Calcutta or Jharkhand. We had to cancel four corporate event bookings in May after the liquor ban was enforced."
Several lounges in the state capital are thinking of shutting shop as their revenue has plummeted post prohibition.
"The public has no other option but to follow the law," said Ravi Shankar, owner of the rather ironically named Hangover lounge. "We have suffered a loss of nearly 70 to 80 per cent in our monthly income. The age group that visited us before prohibition was between 25 and 45 years and now it consists mostly of teenagers. On weekends, we would get 150 customers; now we have a maximum of 50. We had to reduce our entry charges from Rs 1,000 to Rs 200 inclusive of cover charges. We are suffering a loss of nearly Rs 3 to 4 lakh every month. If in the next two-three months the situation doesn't improve, we will have to shut down our business."
Event management firms are also lamenting the loss of revenue following prohibition.
"The liquor ban has affected the party front," said Atul Sojourn, public relations officer at Eventoss Entertainment Pvt Ltd. "We had two cancellations after the liquor ban came into effect. Fewer parties are being organised than before. If they are being organised at all, then they last till 10pm which is not good for entertainment factors. We expect that we will be affected during the Christmas and New Year. People might prefer to move out of Patna during those times."
Those who can afford it are now hosting events like birthday parties and marriage anniversary celebrations in cities like Calcutta or New Delhi to ensure they can have a good time without ending up in jail.
"I celebrated my birthday in the last week of June in New Delhi and my wife's birthday in the second week of July in Calcutta," said a city-based entrepreneur, requesting anonymity.
"Over Rs 50,000 was spent on both occasions including transportation cost. All that money increased the revenue of other states, which could have otherwise added to the revenue of Bihar and also saved some money for me."