It is one of Gujarat's most flourishing industries, generating revenue and employment for thousands of people. But not one paisa of it is legal.

We are talking about the illicit liquor trade. For the record, prohibition is in force in Gujarat; imbibing liquor in this state, where Mahatma Gandhi was born 132 years ago, is against the law except under special circumstances. Off the record, this only means one thing: you buy liquor clandestinely.

Some say the annual turnover of the trade is Rs100 million and it involves people from across the spectrum, right from the poor adivasis to senior politicians and bureaucrats. The huge amount involved, all of it unaccounted for, means that today Gujarat cannot afford to ever lift prohibition. There is too much money and too many reputations involved. Prohibition suits everyone even as it corrodes the Gujarati society by spawning corruption while emasculating the police and compromising the system.

Every time elections come, there is an upsurge in the trade. On the one hand there is heightened police activity necessitating greater discretion, but on the other, the demand for liquor for party workers and the electorate goes up, forcing candidates to procure it clandestinely. Moreover, policemen in the prohibition department are used for election duty. Currently, of the 1,200 cops in the prohibition department, 1050 are being used for election work.

According to a source, three kinds of liquor are available. At the lowest level is what is called potli [literally, pouch] or latha [liquor] in Gujarati. This is the cheapest and its consumption is often responsible for many deaths. It is usually made from fermented jaggery, with certain substances added to increase the potency. Often it is these added substances that prove harmful. Potlis, extremely intoxicating, are available for as little as Rs10.

The next level, said the source, is deshi [country liquor], which is usually available in bottles. It is usually made of fermented fruits. Substances like mahua, famous for its intoxicating effect, are added for effect. Deshi is brewed locally and sometimes smuggled in, though the former is the preferred method as it helps keep the cost low. Just like in other parts of India, it is the preferred drink of the lower middle class.

The final kind is what is euphemistically called IMFL or Indian Made Foreign Liquor, which is smuggled in. These are well-known brands of whisky and rum and are popular with the middle and upper class.

And herein lies a delicate irony. One would have thought that given the cost of smuggling, any IMFL would cost much more than in the neighbouring states. But this is not true, said the source.

In India, the central government imposes a huge excise duty on every bottle sold. For example, if a particular bottle of an IMFL costs Rs500, anywhere up to Rs300 is the excise duty that the central government claims, the rest going to the manufacturer.

But in Gujarat, such alcohol might be sold for about Rs450 or less because there is no excise duty involved at any stage.

Then the bottles, which are properly packed in cartons the way they would be in any other state where drinking is legit business, are dispatched to the cities by road or rail, the former being the preferred method. The only cost over and above that of manufacturing is what the smuggler dishes out by way of bribes to the police and bureaucrats.

Alcohol is smuggled into Gujarat from its neighbouring states -– Rajasthan to the north, Madhya Pradesh to the east, and Maharashtra to the south, and also from the small union territories of Daman, located in south Gujarat near Surat, and Diu, an island that lies off the Kathiawad peninsula.

Liquor is also often procured from the cantonment areas of the state. Personnel of the armed forces, scattered across Gujarat, which shares a land and sea border with Pakistan, are permitted to buy alcohol. Many personnel who buy at subsidised rates from the cantonment shops sell to civilians for a profit.

Retired personnel are allowed to buy and imbibe a specific quota per month, and are known to sell, or at least share, their drinks with close friends and neighbours. These sources are popular for beer, smuggling of which is not very popular since the margins are low. But the procurement of alcohol from serving or retired personnel is limited in quantity and to known people.

Liquor can also be purchased for medical reasons, if prescribed by a doctor.

Finally, foreigners are allowed to acquire a permit and drink liquor, usually in the expensive hotels located in the larger cities.

Only specific communities are involved in the illicit liquor trade and hence the operations are close knit.

Consumption of alcohol is common across Gujarat. Liquor is often served at business functions and marriages irrespective of class, albeit discreetly. This high demand is what fuels the smuggling and production.

The involvement of the police and other officials is easily Gujarat's worst kept secret. The source claimed that for every person caught or truck intercepted, at least two get away. It is believed that even senior politicians and officials are involved in the trade, but as is the story of corruption in India, there is no evidence to implicate anyone important. Every now and then there are reports of some small-time bootlegger being nabbed, who is then prosecuted. Rare is the case of some major operator being caught.

The biggest gangsters in Gujarat started their careers as bootleggers. Compare this with Mumbai where the dons usually started as extortionists or Uttar Pradesh where they started as robbers or kidnappers.

The tragedy of Gujarat is that politicians in need of funds for elections turn to big bootleggers, thus giving the latter a handle. It was during the riots in the early and mid-1980s that the alleged nexus between bootleggers and politician/administration acquired Frankenstein proportions.

Moreover, over 12 years ago, a new trend began when bootleggers, instead of simply playing backroom financiers, began to contest elections, using their money power and the men who worked under them to gain entry into politics. They began by entering the municipal corporations and are now present even in the assembly, having won their political spurs with the backing of both the major political parties in the state: the Bharatiya Janata Party and Congress.