For some years now, MPs and social activists have been debating the need to end the lottery menace in the country. Ironically, says Senior Associate Editor George Iype in the conclusion to his three-part investigation into the lottery business, it is this very trade that sustains some cash-strapped state governments.
Part I: 'The lottery business is the single biggest financial scam in India'
Part II: 'Lotteries are ruining families'
Should lotteries be banned?'
This was the gist of a newspaper advertisement issued by Parliament's Upper House last year.
The result was stunning. Nearly 70,000 responses poured in in the first week itself; most of them argued against a ban on the lottery business. The writers included state governments, MPs, big time lottery agents and street vendors.
For four years now, the central government's attempts to ban the lottery trade have not been successful, thanks to stiff opposition from state governments, some 70 MPs and the immensely-powerful lottery lobby.
The Centre first began its attempt by issuing a Presidential Order -- the Lotteries Regulation Ordinance, 1997 -- banning all single digit lotteries. The Ordinance said single digit lotteries had wrought havoc throughout the country.
A year later, the Ordinance was replaced by the Lotteries Regulation Act, 1998.
Both the Ordinance and the Act were challenged by the Nagaland government who said the state would suffer a huge financial loss if lotteries were banned. As a result, the Guwahati high court stayed the Presidential Ordinance and allowed the Nagaland government to file a plea against the Act.
In November 1998, the Parliamentary committee on home affairs once again suggested banning all lotteries in the country. Consequent to that suggestion, Home Minister L K Advani introduced the Lotteries Prohibition Bill in the Lok Sabha. This, he said, was the "first step" towards a complete ban on the lottery trade.
Piloting the Bill in the Rajya Sabha, Advani said: "Malpractices have crept into the conduct of the lottery business. The lottery trade has an adverse impact on the poorer sections of society."
The home ministry has, in the meanwhile, circulated the Bill to each state government, since they will individually have to abolish lotteries.
The central government does not run a single lottery. Hence, the lottery trade cannot be abolished until each state assembly enacts similar legislation.
Which begs the question: What are the state governments up to? Many of them do not want to ban lotteries, which are a source of revenue. The sales tax imposed on the lottery trade provides funds for not just the cash-starved northeastern states, but also states like Bengal, Karnataka, Kerala, Tamil Nadu and Uttar Pradesh.
The Delhi government, for instance, earned Rs 310 million through the sale of lottery tickets in 1988-89. That revenue shot up to Rs 1.2 billion in 1991-92 and doubled to Rs 2.4 billion in 1993-94. Yet, it banned the sale of lottery tickets in 1995. "We incur an average loss of around Rs 600 million every year because of the ban on lotteries," says a senior Delhi government official.
The lottery industry in Kerala has a turnover of Rs 1.05 billion. In 1996-97, it posted a profit of Rs 130 million; a year later, the figure rose to Rs 150 million. In 1998-99, the profit increased to around Rs 190 million. The state government claims that lottery sales contribute Rs 20 million annually as income tax to the central exchequer.
In Tamil Nadu, net lottery sales are worth approximately Rs 800 million, fetching the state exchequer a minimum revenue of Rs 90 million per annum.
The Arunachal Pradesh government earns Rs 30 million annually as income from lottery sales while the Himachal Pradesh government garners around Rs 47 million.
The states that would be most affected if the lottery business is banned are Manipur, Nagaland and Sikkim. These states are expected to lose anything between Rs 500 million to Rs 700 million annually if lotteries are banned.
The Sikkim government has already registered its protest with the home ministry by pointing out that a ban on lotteries would deprive the state of an important source of income. 'Since Sikkim does not have a significant resource-based revenue, lotteries are the single largest source of revenue in the state,' the letter said.
Adds Kerala Finance Minister T Sivadasa Menon: "It is a fortune industry for many state governments. Why should the Centre ban the lottery trade?"
According to Menon, banning the lottery industry in Kerala would render nearly 30,000 agents, 250,000 sub-agents, 500 employees in the state lottery department and hundreds of workers at government presses, where the tickets are printed, jobless. "Banning lotteries will result in social upheaval in Kerala. The state already has nearly four million unemployed youth."
S Viswambaran, president, Kerala Lottery Officers Association, claims it is improper to slap a blanket ban on lotteries just because irregularities and corruption occur in some parts of the country. "The lottery trade in Kerala is without any irregularities. The tickets are printed at government presses. The distribution network is systematic. It is a methodically-run business here."
V K Vasudeva, vice-president, All India Federation of Lottery Trade, points out that states like Arunachal Pradesh, Nagaland and Sikkim are poor, not easily accessible and economically backward. "The central government has been neglecting these states all these years. The ban on lotteries would create social and economic havoc in these states."
Citing the United Kingdom as an example, he adds that a ban on lotteries has never worked successfully in any country.
Ajit Suri, sole distributor for the Mizoram Lottery and general secretary, Association of Lottery Organisations, agrees. "It is true that a lottery has an element of gambling. But it is not, like the government makes it out to be, a social evil. The poor and the middle-class benefit from lotteries. Besides, there are many other heinous social evils in the country. Why can't the government stop them first?"
The dissenting states and lottery traders are not alone. A powerful group of some 80 MPs and political leaders do not want a ban on the lottery business. In 1999, some 77 MPs from different parties wrote to Prime Minister Atal Bihari Vajpayee, claiming that the proposed ban on lotteries was unnecessary and would deprive the poor of a legitimate dream.
If they have their way, the pursuit of a fast buck will continue to lure the poor. And the only beneficiaries will be some state governments and, of course, the lottery kings.
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