Currency Ban, Beef Ban, Alcohol Ban. Doing Business in the Current Indian Environment

“Ban” seems to be the buzzword in India right now. One would have imagined a widespread uproar against the recent initiatives being taken. After all, Indians are fiercely free willed. On the contrary, the sentiment in the country is positive. Why are bans being imposed and why are Indians more optimistic today than ever before? Let’s look into every ban to understand it better.

Currency Ban

At the stroke of midnight on November 8, 2016, the Government of India demonetized the nation’s two highest-value banknotes – ₹500 and ₹1,000. In an unprecedented move, over 80% of the country’s cash base was eliminated overnight. The reasons for this move were twofold – to arrest the abnormal rise in fake currency (which funds terror) and to curb black money, which funds corruption as well.

The common man did pay an economic price for this demonetization. ATMs with snaking queues became a common sight for almost two months. A number of days were spent waiting at bank counters and ATM machines, which would often run out of cash before your turn came.

Yes, there was hue and cry about the inconveniences. However, mostly people bore the demonetization with grace and with a rekindled spark of patriotism and exhibited eagerness to make a contribution to rid India of terrorism and corruption.

Considering the expanse of India, with more than 60,000 remote villages and a population of more than a billion, the task of re-monetization was a herculean one. And, the Government did a reasonably good job of it.

Questions Remain

What remains to be seen is the actual impact of this colossal endeavor. Did the move curb corruption or simply postponed it? Are people just waiting for the dust to settle before they start generating and dealing in black money again? What is the long-term impact of the currency ban? Will the common man face less corruption in future? Only time will tell.

Beef Ban

The Government of India banned beef in a show of solidarity with the Hindi-belt Hindu sentiment. This sentiment is not in all states. While it’s become “politically incorrect” to share images of one enjoying a juicy steak on Facebook, the ban has not impacted south India. In Kerala, for instance, people are making a public display for eating beef.

Alcohol Ban

From April 1, the sale of alcohol has been banned along national and state highways in India. According to the ban, no liquor stores can operate within 500 meters of the highways or be directly accessible from any national or state highway. Hundreds of liquor and wine shops as well as restaurants, pubs and hotels have been severely hit by this ruling.

Although many perceive this to be a move by the current government, it in reality is a Supreme Court order. What plagues India is the weak enforcement of rules. This problem is tackled by the creation of new and more stringent laws. And, this will continue…till compliance remains lax and enforcement poor.

The alcohol ban was inevitable. What can you expect after 70 years of failing to curb drunken driving? For instance, the US curbs drunken driving by holding the bartender accountable – you lose your license and may land in jail.

Will the alcohol ban reduce deaths on the road? Maybe not. Haven’t we learned anything from America’s alcohol ban from 1920 to 1933? Known as the “prohibition era,” the ban was a failure. A law that bans something acts as a catalyst for its illegal production and distribution. A law that restricts anything leaves the system handicapped to enforce responsible consumption.

As was seen during the prohibition era in the US, crime increased. There was a rise of crime syndicates that bribed public officials and law enforcement officers to continue their production and distribution of alcohol. Not only was alcohol being manufactured illegally, but there was nothing to control or regulate the process or ingredients being used. Thus, most of what was produced was dangerous and had very high alcohol content.

So, while worker productivity declined on one hand, enforcement of the prohibition cost millions of dollars.

This phenomenon is not restricted to alcohol. Place bans on anything and be prepared to see a rise in bribery, corruption and illegal production. A stringent law is the best catalyst for an unregulated industry flourishing, with no accountability and no need to pay any taxes!

Conclusion

Unnecessarily, the moves we see today are the result of years of poor compliance. The objectives are laudable, but execution remains key. If existing laws are enforced, then stringent laws are not needed. We will need to evolve as a society and as a nation. We need to understand that freedom is NOT about being able to say or do whatever one feels like, but to be mindful of the impact of our actions on others, ensuring that their freedom is not curtailed.