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Lottery ban causes socio-economic problem in Kerala

D Jose in Thiruvananthapuram

The lottery agents and sellers in Kerala have taken to the street to collect one million signatures for submitting a memorandum to Prime Minister Atal Behari Vajpayee against the national government’s decision to ban lotteries.

The memorandum would be submitted following a massive Raj Bhawan March on January 28. Almost all the political parties in Kerala have extended support to the agitation being spearheaded by a confederation of 15 associations of agents and sellers.

The luck trade in Kerala is a major economic activity providing direct employment to about 300,000 people without any substantial investment. The annual turnover from sales of ticket is a whopping Rs 3 billion, according to the Government Lotteries Department sources.

The state government considers that the ban would create serious economic and social problems, as the people dependent on lotteries for eking out a living are mostly children and the handicapped, who are not fit to take up any other job. The government would not be able to find any alternate job to this section if they are thrown out of 'jobs' by the ban.

There are already three million youths, mostly educated, in the live registers of the employment exchanges.

The lottery has been one of the cheapest avenues for self-employment. It does not require much investment to set up a sales outlet. Majority of the people involved in the business have no outlet at all. They sell them in public transport vehicles, waysides and public places.

The ban would also affect the exchequer badly. The government lottery, often referred to as the "mother of all official Indian lotteries", is one of the few 110 public sector ventures in the state that makes profit. The government has been running the lottery without any complaints so far.

In monetary terms, what the state government stands to lose is Rs 165 million each year, which is what the Kerala Lotteries makes annually after accounting for all expenses. Ironically, the Centre also stands to lose by banning lotteries as it has been earning Rs 150 million each year by way of income tax from various state lotteries.

Last year, the state lottery made a profit of over Rs 320 million by way of sales proceeds, duty and unclaimed prizes. A sum of Rs 40 million was added to the state kitty by way of unclaimed prizes alone.

In 1996-97, the Centre received Rs 150 million by way of income tax for the prize money, while the state got Rs 130.5 million as net profit, according to official sources.

Kerala has been a pioneer of government lotteries. The lottery introduced in the state in the '70s gained immense popularity as an economic activity to generate employment without major investments.

Several states emulated Kerala and there are now 60 lotteries in the country now. The country's total annual revenue from lottery sales is put at Rs 700 billion. Although other states toed the Kerala line, they have not been lucky enough to make the grade the state made in credibility.

When the proposal for ban had come up before a meeting of chief ministers in 1998, Kerala had made it clear that it would oppose the move. Karnataka, West Bengal, Nagaland and Manipur had also opposed the proposal.

Business

Kerala