Editorials/Opinions Analyses For UPSC 6 November 2021

Contents

1. The cost of alcohol prohibition: Hooch tragedies
2. Charting a trade route after the MC12

The cost of alcohol prohibition: Hooch tragedies

Context:

The deaths in the last few days of at least 25 people in Bihar apart from several others taking ill after consuming spurious liquor points to the unintended but not unexpected consequences of the total prohibition law that has been in effect in the State for more than five years.

Relevance:

GS-II: Polity and Constitution (Constitutional Provisions, Government Policies and Initiatives, Issues arising out of the design and implementation of the policies), GS-I: Indian Society

Dimensions of the Article:

1. What are the dangers of Illicit Liquor/Spurious Liquor/Hooch?

1. Impact of illicit liquor on the body
2. Directive Principles of State Policy (DPSP) on Alcohol ban
3. Is it different from Dry days?
4. States practicing prohibition of alcohol
5. History of Prohibition laws in some states
6. What has been the impact of Prohibition laws in states?
7. Arguments Against Alcohol Prohibition laws
8. Way Forward

What are the dangers of Illicit Liquor/Spurious Liquor/Hooch?

• ‘Hooch’ is a term used for spurious alcoholic preparations and consumption of such preparations is harmful / fatal.
• Spurious liquors include:
  • Illicit liquor (un-authorized preparation, not fit for human consumption and not complying with the BIS standards) and
  • Denatured alcohol (prepared for industrial uses and is rendered entirely unfit for human consumption by adding denaturants).
• The main factor for its unsafe nature is because usually substandard raw materials are used which are often spiked with other chemicals.
• Unlike legal production of liquor which takes as many as 10 days to complete the whole process of fermentation, illicit liquor is produced within 24 hours.
• Traces of methanol are found in legally made and licenced alcoholic drinks like beer while country-made liquor, when not brewed with care, can contain large quantities of methanol. Methanol is essentially a toxic industrial-standard alcohol, which is added to increase the potency of liquor.
• Sometimes, industrial methyl alcohol or denatured spirit (mixture of ethanol and methanol) is added by illicit brewers to save costs.
• There have been incidents where chemicals like organo-phosphorus compounds have been added to illicit liquor.

Impact of illicit liquor on the body

• Methanol gets absorbed in the gastrointestinal tract of the person drinking it. It can also enter the system through the skin and by inhalation.
• Methyl alcohol is extremely toxic — 10 ml can cause blindness and 30 ml can cause death within 10 to 30 hours.
• Toxic effects arise from methanol metabolising in the body to first form formaldehyde. Formaldehyde, which is thought to be a cancer-causing agent, is quickly converted into formic acid.
• In the normal course of body activities – like when small quantities of methanol are ingested from fruits and vegetables or produced in trace amounts in the body itself – formic acid is flushed out of the body during excretion. When large amounts of methanol enter the body with copious amounts of spurious liquor, formic acid accumulates in body tissues leading to acidosis – adversely affecting various organ systems.
• Methanol poisoning can result in death within few hours if not treated immediately or may be delayed for a few days.

Directive Principles of State Policy (DPSP) on Alcohol ban

• The Directive Principle in the Constitution of India under Article 47 states that “The state shall undertake rules to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health”.
• The Directive Principles are not-justiciable rights of the people but fundamental in the governance of the country, hence, it shall be the duty of the State to apply these principles in making policy laws (Article 38).
• National Prohibition of alcohol was advocated by Mahatma Gandhi, as well as by many Indian women. Prohibition, in the states of India that have implemented the policy has led to lower rates of drinking among men, as well as a decreased incidence of violence against women.

Is it different from Dry days?

• Dry Days are specific days when the sale of alcohol is prohibited. Dry Days are fixed by the respective State Governments.
• Most Indian states observe dry days on major religious festivals/occasions depending on the popularity of the festival in that region. E.g.:
  1. National holidays such as Republic Day (26 January),
  2. Independence Day (15 August) and
  3. Gandhi Jayanti (2 October) are usually dry days throughout India.
  4. National dry days also occur during Election Commission of India-ordained voting and result days.
• Dry days also depend on the establishment selling alcohol. For example, generally 5-star hotels do not have to observe all the dry days that liquor stores and small bars may have to.

States practicing prohibition of alcohol

• Alcohol prohibition in India is in force in the states of:
  1. Bihar,
  2. Gujarat,
  3. Mizoram,
  4. Nagaland as well as in
  5. the union territory of Lakshadweep (Consumption is permitted only on the island of Bangaram).
• All other Indian states and union territories permit the sale of alcohol.
• There are five States that no longer practice prohibition, however, they had previously enforced prohibition and the repealed it later.
  1. Andhra Pradesh
  2. Haryana
  3. Kerala
  4. Manipur
  5. Tamil Nadu

History of Prohibition laws in some states

• The first hint at the prohibition of liquor was through the Bombay Abkari Act, 1878 (in the Province of Bombay). This Act dealt with levying of duties on intoxicants, among other things and aspects of prohibition via amendments made in 1939 and 1947.
• There were “many lacuna” in the Bombay Abkari Act, 1878, from the point of view of the government’s decision to enforce prohibition, hence, it led to the birth of Bombay Prohibition Act, 1949.
• Following the reorganisation of Bombay province into the states of Maharashtra and Gujarat in 1960, there was continued amendment and liberalisation in the state of Maharashtra, especially in 1963.
• Gujarat adopted the prohibition policy in 1960 and subsequently chose to enforce it with greater rigidity, but also made processes easier for foreign tourists and visitors to get liquor permits. In 2011, the Act was renamed as Gujarat Prohibition Act. In 2017, the Gujarat Prohibition (Amendment) Act was passed with provision of up to ten years jail for manufacturing, purchase, sale and transportation of liquor in the dry state. Gujarat is the only Indian state with a death penalty for the manufacture and sale of homemade liquor that results in fatalities.
• The Nagaland Liquor Total Prohibition Act, 1989 (NLTP Act) banned the sale and consumption of alcohol in 1989. However, enforcement of the ban is lax and Indian Made Foreign Liquor is usually readily available.
• The Mizoram Liquor Total Prohibition Act, 1995 banned sale and consumption of alcohol effective from 1997. Later, the Mizoram Liquor Prohibition Act, 2019 was passed for which the specific rules are yet to be notified.
• Bihar Chief Minister declared a total ban on alcohol in 2016. Later on the Patna High Court ruled that the ban is “illegal, impractical and unconstitutional”. However, the Bihar government enforced a new stringent law only to stay adamant on it after the order. As per the new liquor law, those found indulging in unlawful import, export, transport, manufacture, possession, sale, intoxicant or liquor could attract a minimum 10 years of jail term which may extend to imprisonment for life besides a minimum fine of Rs 1 lakh which may extend to Rs 10 lakh.

What has been the impact of Prohibition laws in states?

Bihar

• Within a year of prohibition in Bihar, the number of murders and gang robberies decreased by 20%. The number of riots fell by 13% and traffic accidents were reduced by 10%.
• However, after the prohibition of alcohol in Bihar, substance abuse has increased significantly due to liquor being hard to access.
• There was also an increase in household expenditure in Bihar after prohibition, evident from the increase in sales of milk by 10%, cheese by 200%, two-wheeled vehicles by 30%, and electrical appliances by 50%.

Gujarat

• Even after prohibition in Gujarat, smuggling and illicit sale of alcohol are very common and “Folder” is a slang term of unknown origin, used in Gujarat to refer to a bootlegger who delivers alcohol on-demand.

Arguments Against Alcohol Prohibition laws

• Tax revenues from alcohol is a major part of any government’s revenues. These enable the government to finance several public welfare schemes. Absence of these revenues severely impacts state’s ability to run public welfare programmes.
• The burden on judiciary and administration is heavy as it can be seen in the case of Bihar’s prohibition law which certainly led to a reduction in alcohol consumption, the related social, economic, and administrative costs have been far too much to justify gains. Prohibition has also crippled the judicial administration.
• Today, Indian Made Foreign Liquors (IMFL) industry contributes over 1 lakh crore in taxes every year. It supports the livelihood of 35 lakh farming families and provides direct and indirect employment to lakhs of workers employed in the industry. Hence a prohibition law will certainly have an adverse impact on the generated revenue and employment.

Way Forward

• From a medical viewpoint, the availability of licit spirits that contain lower alcohol levels, combined with a sustained public health campaign to wean people away from the drinking habit and to warn them about the effects of contaminants are key interventions.
• The capability of the health system in every district needs to be raised, to reduce the damage from methanol through immediate, simple detoxification therapies.
• Health communication about harm from alcohol is particularly relevant during the pandemic, since there is evidence of reduced immunity to viruses among those who are chronic alcohol consumers.
• As the World Health Organization points out, governments should regulate the quality of legal alcoholic drinks, while actively tracing and tracking illicit alcohol.
• This can be achieved only through cooperation from the community, particularly from women’s groups.

-Source: The Hindu

Charting a trade route after the MC12

Context:

The World Trade Organization (WTO)’s 12th Ministerial Conference (MC12) is being convened in Geneva, Switzerland at the end of November 2021.

Relevance:

GS-II: International Relations (Important International Institutions), GS-III: Indian Economy

Dimensions of the Article:

1. World Trade Organization (WTO)
2. Functions of WTO
3. Structure of WTO
4. The Importance of the WTO to World Trade
5. About WTO’s Ministerial Conferences
6. Important Topics for the MC12

World Trade Organization (WTO)

• The World Trade Organization (WTO) is an intergovernmental organization that is concerned with the regulation of international trade between nations.
• It is the largest international economic organization in the world.
• The headquarters of the World Trade Organization is in Geneva, Switzerland.
• The WTO deals with regulation of trade in goods, services and intellectual property between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements, which are signed by representatives of member governments.
• The WTO prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals.
• Trade-related disputes are resolved by independent judges at the WTO through a dispute resolution process.
• The WTO has 164 members (including European Union) and 23 observer governments (like Iran, Iraq, Bhutan, Libya etc.)
• India is a founder member of the 1947 GATT and its successor, the WTO.

Origin of WTO

• The WTO is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1947.
• The Uruguay Round (1986-94) of the GATT led to the WTO’s creation. WTO began operations on 1st January, 1995.
• The Agreement Establishing the WTO, commonly known as the “Marrakesh Agreement”, was signed in Marrakesh, Morocco in 1994.

Functions of WTO

• Trade negotiations: The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They set procedures for settling disputes.
• Implementation and monitoring: WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted. Various WTO councils and committees seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented.
• Dispute settlement: The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly.
• Building trade capacity: WTO agreements contain special provision for developing countries, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities, and support to help them build their trade capacity, to handle disputes and to implement technical standards.
• Outreach: The WTO maintains regular dialogue with non-governmental organizations, parliamentarians, other international organizations, the media and the general public on various aspects of the WTO and the ongoing Doha negotiations, with the aim of enhancing cooperation and increasing awareness of WTO activities.

Structure of WTO

• Structure of the WTO is dominated by its highest authority, the Ministerial Conference, composed of representatives of all WTO members, which is required to meet at least every two years and which can take decisions on all matters under any of the multilateral trade agreements.
• The General Council is composed of all WTO members and is required to report to the Ministerial Conference.
• The General Council convenes in two particular forms:
  • Dispute Settlement Body: To oversee the dispute settlement procedures.
  • Trade Policy Review Body: To conduct regular reviews of the trade policies of individual WTO members.

The Importance of the WTO to World Trade

• The WTO is at the forefront of efforts to ensure unimpeded global free trade and reduce trade barriers, operating on a rules-based multilateral system.
• It has made important contributions to the progress made around the world towards promoting global trade. This has led to the growth of a number of economies, the emergence of new markets – all important factors not only in improving business, but also in lifting people out of poverty.
• It does this by implementing, regulating and operating trade agreements between countries, and provides a fair forum for trade negotiations between member countries, mediating on disputes as they arise. It aims to help with imports, exports and conducting trade fairly.
• The WTO also cooperates with the IMF (International Monitory Fund) and World Bank to ensure global economic policies are fair and cohesive. Therefore, it isn’t a matter of the WTO being important for international business, but of it being absolutely fundamental.
• Different countries operate on different regulations and rules between different countries, and it’s not easy for an international business to stay on top of these when it operates in multiple countries. But the job would be a lot more difficult if these rules were unfair or unreliable, or not consistently applied.
• The importance of a regulatory body such as the WTO is especially pressing at a time of such pronounced global uncertainty – several of its members are currently using it to dispute President Trump’s Trade tariffs, while a no-deal Brexit scenario would likely see the UK revert to WTO rule.

About WTO’s Ministerial Conferences

• The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions.
• The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements

The task ahead for MC12

• Recent WTO estimates show that global trade volumes could expand by almost 11% in 2021, and by nearly 5% in 2022, and could stabilise at a level higher than the pre-COVID-19 trend.
• The MC12 needs to consider how in these good times for trade, the economically weaker countries “can secure a share in the growth in international trade commensurate with the needs of their economic development’, an objective that is mandated by the Marrakesh Agreement Establishing the World Trade Organization.
• Some of the areas are currently witnessing intense negotiations, these include adoption of WTO rules on electronic commerce, investment facilitation, and fisheries subsidies.

Important Topics for the MC12

1. IPR waiver for Covid-19 related technologies: Pharmaceutical companies have used monopoly rights granted by their IPRs to deny developing countries access to technologies and know-how, thus undermining the possibility of production of vaccines in these countries.
2. To remedy this situation, India and South Africa had tabled a proposal in the WTO in October 2020, for waiving enforcement of several forms of IPRs on “health products and technologies including diagnostics, therapeutics, vaccines, medical devices. This proposal, supported by nearly two-thirds of the organisation’s membership, was opposed by the developed countries batting for their corporates.
3. Fisheries subsidies: Discussions on fisheries subsidies have been hanging fire for a long time, there is considerable push for an early conclusion of an agreement to rein in these subsidies. The current drafts on this issue do not provide the wherewithal to rein in large-scale commercial fishing. Large scale commercial fishing is depleting fish stocks the world over, and at the same time, are threatening the livelihoods of small fishermen in countries such as India.
4. E-commerce: On the negotiating table are issues relating to the liberalisation of the goods and services trade, and of course guarantee for free flow of data across international boundaries, all aimed at facilitating expansion of businesses of e-commerce firms. In fact, the decision on a moratorium on the imposition of import duties agreed to in 1998 has become the basis for a push towards comprehensive trade liberalisation — a perfectly logical way forward, given that the sole objective of the negotiations on e-commerce is to facilitate expansion of e-commerce firms.
5. Investment facilitation: In 2001, the Doha Ministerial Declaration had included a work programme on investment, but developing countries were opposed to its continuation because the discussions were geared to expanding the rights of foreign investors through a multilateral agreement on investment. An investment facilitation has reintroduced the old agenda of concluding such an investment agreement.

-Source: The Hindu