From Andhra to Delhi, Gujarat to Bihar, governments shake up liquor policies

Liquor policies in some election-bound states and cities have provoked intense political arguments and questions. Changes made or proposed by incumbent government and opposition parties have given rise to spirited debates in Uttar Pradesh, Punjab, Gujarat and Delhi, the first two electing new state assemblies in February and March.

But liquor policy changes are becoming hot topics even in states like Bihar and Andhra Pradesh, where state elections are years away. Interestingly, even unconnected announcements in the recent Union Budget by Finance Minister Nirmala Sitharaman are seen as pointers towards some relaxation in the six-decade-old prohibition policy of dry Gujarat, where assembly elections are due later this year.

Bihar, which has been dry for a shorter period, is contemplating relaxation in the penal provisions for possession and consumption of the intoxicant after strong words from the Supreme Court. The apex court pointed to the large number of bail applications regarding such cases and many addicts languishing in Bihar's jails. 

Uttar Pradesh which has a very liberal excise policy has, however, seen a large number of deaths due to consumption of illicit liquor. Here principal challenger Akhilesh Yadav of the Samajwadi Party has promised to set up vodka factories in the state so that potatos grown by the state's farmers don't go waste.

 

Liquor shops next door in Delhi
In the national capital, the Bharatiya Janata Party (BJP) has launched a city-wide campaign against the Aam Aadmi Party (AAP) government whose new excise policy allows opening of more liquor shops in residential areas.

Firebrand Union minister Smriti Irani, who is in-charge of the Women and Child Welfare Ministry, has been engaged to address virtual rallies ahead of the elections for three Delhi municipal corporations this year, all of which are controlled by her party, BJP. Irani has reeled off statistics and provided details on how the liquor shops are located close to schools and temples, which is not normally done. Irani plans to hit the streets once the prohibition on road shows is called off by the Delhi Disaster Management Authority (DDMA) after considering the latest pandemic threat.

But the AAP has countered that the BJP is totally in the grip of liquor mafia and has got huge funding from liquor shop-owners and wholesalers who have lost their licences. AAP has also alleged that Congress chief ministers in Punjab — Amrinder Singh and Charan Singh Channi — have freely allowed liquor to flow, without showing any regard for its impact on social life.

 

An exception in Dry Gujarat?
But it is the word "social" which has become a burning word in Gujarat which has been the stablest dry state. The state government is mulling on proposals for allowing liquor to be served in two restaurants in the Special Economic Zone (SEZ) of the Gujarat International Finance Tec-City (GIFT), on the outskirts of state capital Gandhinagar, for the enjoyment of executives working in the companies coming up here. There has been a demand to allow "evening public social life" for such personnel who would come from different countries and Indian states.

(GIFT was set up in 2007 by the current Prime Minister Narendra Modi when he was the Gujarat chief minister. It is being developed as an alternate centre for financial and technical companies in place of the nation's commercial capital, Mumbai.)

At present about 50,000 persons, including 10,000 foreigners and NRIs, are given special permits through which they can buy liquor at authorised shops, but they can consume it only at homes or in hotels. Drinking in the public or even moving out in public after a good indoor drinking session attracts fines and imprisonment. But as a part of GIFT is an SEZ for which domestic laws are not applicable, GIFT itself has applied licence for a restaurant which will serve liquor so that executives can openly drink. Former Chief Minister Vijay Rupani and present Chief Minister Bhupendrabhai Patel have also favoured relaxation for the SEZ so that best global talent is encouraged to come. A decision was expected during the Vibrant Gujarat Global Summit in January, but the conclave itself got postponed due to the pandemic's return.

 

Three Budget decisions for GIFT
In her budget, Sitharaman made three significant policy decisions in favour of GIFT. Reputed international universities would be allowed to establish world-class graduation and post-graduation courses in finance and related areas, and no Indian laws would be applicable to them. Second was the proposal to establish an international arbitration centre so that disputes between foreign companies and their partners would be heard and decided in GIFT. The third decision was to give tax concessions in income from sale of financial derivatives traded in GIFT, so that this busy business would move here to avail the tax break. 

 

But GIFT lacks on a few counts
But the other big moves to shift international banking activities from Mumbai and Delhi to GIFT has not been announced due to various factors including the ban on open liquor consumption. These two cities, along with Bengaluru and Hyderabad, have an active social night life. 

As Gujarat CM announced his intention to woo Elon Musk of Tesla to locate his electric vehicle factory in the state, Musk's team pointed out that moral policing on liquor and other limits on freedom was not acceptable to the revolutionary entrepreneur.

Meanwhile, the Gujarat High Court has said petitions to demand the right to consume liquor at home by all state citizens can be entertained by the court, despite opposition from the state government.

 

What Andhra Pradesh does
Meanwhile, in Andhra Pradesh, the popular Chief Minister Y S Jagan Mohan Reddy wants to move the state towards total prohibition in a decade. He has closed permit rooms attached to liquor shops, where customers can enjoy the liquor bought at the shop with snacks. Further, it has banned visitors to the state from other Indian states from bringing any liquor for their own consumption. 

Liquor is one volatile liquid on which only states still can reap a high tax. This may continue as there is no move so far from the Narendra Modi Government for a 'One Nation, One Liquor Tax' on the model of the of the Goods and Services Tax (GST), though on the other volatile liquid — petroleum — both the centre and the states collect separate taxes.