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Highway Liquor Ban: States Stare At Huge Revenue Losses, Scramble For Solutions

Some of the options being considered by states are denotifying state highways, asking for more time to implement the order and relocating existing stores

Written By: Simar Singh | December 11, 2017 12:45 PM | News

Highway Liquor Ban: States Stare At Huge Revenue Losses, Scramble For Solutions
  • The Supreme Court's ban on the sale of alcohol on highways came into effect
  • This has hit businesses and state revenues
  • State governments are now trying to find ways to circumvent the order

Angry business owners, potential losses to revenue, possible unemployment and an impact on tourism—states seem to have a lot to deal with due to the Supreme Court’s order prohibiting shops, restaurants and bars located on or within 500 metres of state and national highways from selling alcohol. The order came into force on April 1 with the motive of curbing drink driving in a country which has some of the deadliest highways in the world with a high number of road accidents, deaths and fatalities reported each year.

Read More: How Dangerous Are India’s Roads?

However, despite states having a few months to prepare between the Supreme Court ruling and its eventual implementation, April 1 was a day of chaos. This mostly stems from the fact that Attorney General Mukul Rohatgi had initially given a legal opinion that the ban was limited to shops and not restaurants and pubs. The Supreme Court, however, did not hold the same view and clarified that the ban extended to all kinds of liquor vends including restaurants and bars on March 31.

Read More: Supreme Court Hotels, Restaurants Along Highways From Serving Liquor

Since then, states have been looking at different ways of reducing the severity of the impact of the ban. Some of the options being considered are denotifying state highways, asking for more time to implement the order and relocating existing stores. Here’s a look at what’s happening.

Also Read: State Governments Mull Over Denotifying Highways To Work Around Highway Liquor Ban

In an effort to skirt the Supreme Court’s order, the Rajasthan’s Public Works Department (PWD) is set to denotify sections of its state highways.

This will be done by recategorising sections of highways which pass through populated areas, as ‘urban roads’ that are not affected by the ban.
According to an order which was issued by the Rajasthan government on April 4, highways which pass through city limits and have a bypass will be denotified.

Rajasthan’s excise department had estimated that nearly 2,800 shops were located on national and state highways, a government official told NDTV. The denotification move could clear nearly 450 liquor shops to resume sales.

Goa may be one of the worst affected states. According to the All Goa Liquor Traders Association 30 per cent of the state’s shops, bars and restaurants have had to cease the sale of alcohol. This includes 789 alcohol retailers and 2,289 bars and restaurants.

“3,210 of our 9,900 shops, bars and restaurants have been impacted. This is a huge loss for Goa and will severely impact its reputation as a preferred tourist destination. We have asked the government to consider denotifying the highways or make the measurement of 500 metres from the highways based on the approach to a particular shop or bar (distance taken to reach a place from the highway rather than the radius). Denotification could save 50 per cent of the establishments impacted,” says Dattaprasad Naik, President, All Goa Liquor Traders Association.

The state government is also being asked to look at making an exception for areas with a population 20,000 which reduces the distance from highways to 220 metres in stead of the original 500 metres.

“If we consider local bodies as areas and reduce the distance to 220 metres, at least a thousand shops and bars could be saved,” he says.

On April 2, Chief Minister Manohar Parrikar called a meeting with top excise and finance department officials to look at solutions. One of the possibilities discussed was to relocate liquor businesses from the national highways to interior areas.

On March 16, in a preemptive move, the Chandigarh administration had already declared several state highways which cut through the city as ‘major district roads’, reversing a 20-year-old decision which had turned all major roads in the union territory into state highways to improve quality and maintenance. Had this not been done, Chandigarh would have gone completely dry.

However, 88 bars and restaurants and more than 70 restaurants are still affected by the Supreme Court order, according to estimated made by the Hotel and Restaurant Association of Chandigarh.

“Denotifying the highways has simply circumvented the issue. While we do not doubt the wisdom of the Supreme Court, we believe that the decision was not well thought out. What we need is a revision of the judgment and stronger drink driving laws that are sustainable,” says Manmohan Singh, Chairman, Hotel and Restaurant Association of Chandigarh.

Also Read: Drink Driving Laws In Other Countries And What India Can Learn

Today (April 4), the city’s hotel and restaurant owners held a peaceful protest against the order.

“We would like a logical conclusion to this and would like the Prime Minister to intervene. The move impacts business, the confidence of entrepreneurs, jobs and tourism,” Mr Singh says.

Uttar Pradesh
Just as the order prohibiting the sale of alcohol along and within 500 metres of highways kicked in on April 1, Uttar Pradesh’s Public Works Department (PWD) issued a notification reclassifying internal city roads that were state highways as ‘additional district roads’ while city bypasses were categorised as state highways.

According to Uttar Pradesh’s Excise Department’s financial statements, in the Financial Year 2015-16, the state earned ₹14,083 crores in revenue from liquor.

Tamil Nadu
Government officials in Tamil Nadu are currently looking at the best way to relocate liquor vends that have been impacted by the Supreme Court order. Interestingly, Tamil Nadu also receives the highest amount of revenue from alcohol among all states (₹29,672 crores in FY 2015-16) and all liquor stores are run by the Tamil Nadu State Marketing Corporation Limited (TASMAC).

Reports claim that 3,320 outlets have been closed in the state. These are more than half of the outlets run by TASMAC.

Today, the Kerala government announced its intention to seek more time from the Supreme Court to implement the Supreme Court’s order. Its excise department has estimated that the order could cost the exchequer ₹5,000 crores in revenue.

This decision was taken at a meeting chaired by Chief Minister Pinarayi Vijayan which also decided to try and relocate liquor vends beyond the 500-metre demarcation, PTI reports. The Kerala Excise Department says that nearly 1,956 outlets would have to be relocated.

(With inputs from PTI)

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