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PIL on liquor ban: Tighten law, but don’t cripple tourism, says industry

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JAIPUR: Reacting to a PIL seeking ban on liquor in Rajasthan, industry bodies representing hotels and restaurants argued that such a move will not only give rise to bootlegging but also kill the tourism and hospitality industry which is the mainstay of the state’s economy.

Drawing parallels with Kerala which is also heavily dependent on tourism, they said if the prohibition on sale of liquor is imposed Rajasthan will lose the gains it has accumulated over the years as a location for destination weddings and large conferences.

TimesViewWhile the PIL rightly highlights the ill-effects of liquor on human health, fatal accidents, and social disorder in some instances, past experiences show ban and bootlegging has become two sides of same coin. For a state like Rajasthan which is heavily dependent on tourism as it not only generates revenue for the exchequer but also employs a large number of people, the decision would be a tight-rope walking. Around five panchayats in the state have voted for making the villages liquor-free but can that be a yardstick for the whole state is a big question. The state’s popularity as a location for destination weddings and conferences has grown tremendously in the past five years. If not total prohibition, laws governing manufacturing, distribution and sale of liquor can be made stringent to reduce the problems that liquor creates.

 

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Currently in the hearing stage in the Rajasthan High Court, the PIL filed by Rajasthan Bar Federation, a body of advocates and former high court judges, hammers home the ill-effects of alcohol on human health and how it aids fatal accidents.

To force the issue, the PIL makes a reference to the five panchayats in Rajasthan that sought referendum on liquor ban under Rajasthan Excise (closure of country liquor shops by local option) Rules, 1975, and voted against liquor sale in the villages.

However, the industry bodies said that alcohol ban or the idea of prohibition have only served as deluded political experiments in the past and an election narrative for political parties, which have never proved to be the right move.

“There needs to be a focus on responsible consumption of alcohol but prohibition is not a solution as it has multiple adverse effects like bootlegging, increase in sale of non-regulated liquor, thereby leading to creation of black market, illegal trading and gains by neighbouring states,” said Rahul Singh, president of National Restaurant Association of India (NRAI).

Singh said tourism in Rajasthan is a centrepiece for the state’s economic growth and has a significant multiplier effect on the economy as it has pushed building of infrastructure and connectivity, while creating large number of jobs.

Drawing attention to Kerala which banned liquor in 2014 but now has started issuing lincences after the new government came to power in 2016, he said tourism becomes the first casualty of such prohibitions.

The state’s ‘Tourism Trends, Trade Survey’ conducted in July 2016 showed respondents said that liquor ban one of the main reasons behind the decline in foreign tourist arrivals. Once the ban was eased, foreign tourist arrival growth bounced back to 10.9% and hotel occupancy, which had dropped to 64% between 2014 and 2016, returned to its earlier trend, at 77.6%, the survey found.

According to the survey, MICE tourism, which clocked a growth of 9% in 2013, shrunk to negative territory, with organisations opting for Karnataka or even Sri Lanka for their conferences. Eventually, to counter the drop in tourism growth, Kerala had to ease its liquor ban policy and allow three star and above hotels to serve alcohol.

Bihar, which imposed prohibition in 2016, has seen a 25-30% decline in its F&B sector, including hotels and restaurants. Early estimates show significant loss of MICE tourism to neighbouring states. Last month, the government proposed to ease the ban on liquor.

Similarly, Gujarat, the oldest dry state in the country had to amend its prohibition policy to attract tourists. Between 2012 and 2016, 23 hotels were given liquor licences, and in 2013, on-arrival permits for alcohol were made available to tourists at airports and hotels. Today, tourists can apply online for a one-month permit.

A member of the Hotel and Restaurant Association of Rajasthan said that merely infrastructure is not enough to attract tourist. It is the complete holistic experience that a traveler looks to take away, he added.

Liquor Ban Narrative in India

Kerala: In August 2014, the govt banned liquor in the state. It neither issued new licences nor renewed existing ones. After winning state polls in May 2016, LDF govt said relaxed the policy and conducted ‘Tourism Trends, Trade Survey’ in July 2016.

The survey showed tourists inflow growth falling to 6.7% from 7.8%. Once the ban was eased, foreign tourist arrival growth bounced back to 10.9%. Hotel occupancy which had dropped to 64% from 2014 to 2016, rose to 77.6%.

Gujarat: The oldest dry state in the country Gujarat had to amend prohibition policy to attract tourists. Between 2012 and 2016, 23 hotels were given a liquor licence, and in 2013, on-arrival permits for alcohol were made available to tourists at airports and hotels. Today, tourists can apply online for a one-month permit.

Bihar: Bihar banned liquor in 2016 and has seen a 25-30% decline in its F&B sector. Early estimates show significant loss of MICE tourism to neighbouring states. Last month, the cabinet amended law and made liquor consumption a bailable and non-cognisable offence.

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