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SC prohibits liquor sale on NHs, urges states to stop issuing licenses
Thursday, 06 April, 2017, 08 : 00 AM [IST]
Ashwani Maindola, New Delhi
The Supreme Court, in its order, has banned the sale of liquor on national highways (NHs), and has directed the state governments to cease and desist from issuing licenses after March 31, 2017.

It clarified that the ban on sale of liquor within a particular distance of state and national highways, whether it be 220m or 500m, extends to hotels, restaurants, pubs and bars, and not just to liquor vends.

According to sources, the apex court did not accept attorney general Mukul Rohatgi's argument that banning liquor vends on highways, state and national, did not apply to hotels and restaurants.

While delivering the verdict, a three-judge bench, headed by chief justice J S Khehar, observed that in terms of deprivation caused to society of its productive social capital, road accidents imposed unacceptable costs. And liquor was one of the major reasons for road accidents.

Meanwhile, many state governments have reportedly started denotifying the state highways to circumvent the law.

Restaurateurs and hoteliers, however, remained worried about their businesses, that have taken a hit ever since the order came.

In Delhi and the National Capital Region (NCR) alone, there are a number of hotels, restaurants and bars on the highway, which are likely to be hit by this order.

In the Delhi Aerocity complex (near the Indira Gandhi International Airport), and in Gurgaon, five-star hotels  (including the Leela Ambience, Westin, Pullman and Oberoi), restaurants and bars situated along the national highways passing through Delhi, including DLF CyberHub, will have to stop selling alcohol.

Amitabh Kant, chief executive officer, Niti Aayog, said, “Travel and tourism have a vast potential to emerge as a key employment creator for India, and there is a need for predictability, consistency and clarity of policies.”

Tourism and culture minister minister Mahesh Sharma said, “The government will try to find a solution to the issue raised out of the Supreme Court verdict of March 31, 2017, by which hotels and restaurants within the 220m radius of the highways are asked to stop serving liquor in their premises.”

After meeting the representatives of the hoteliers in Delhi, he said the government would try to work out some middle-level solution to the problem, as the order would impact India’s tourism prospects in a big way.

Sharma said, “It is a state subject. The government will consult with the states and come up with a solution to the problem by remaining within the framework of the Supreme Court order.”  

Representatives of various associations of the tourism and hospitality industry also met in Delhi NCR and decided to build pressure on the political leadership on the issue, as there will be a loss of revenue to the states and a loss of large-scale employment in the hospitality industry in the wake of this order.

The Federation of Associations in Indian Tourism and Hospitality (FAITH) issued a statement, which said, “Establishments approved under the tourism category exist primarily for lodging, conferencing, meetings, banqueting and dining out experiences which include liquor service as a part of the overall experience. None of these establishments are licensed for, nor practice, nor promote the sale of liquor to be consumed outside of them.”

FAITH claimed that these establishments employed over five crore people directly and indirectly, impacting the living conditions of their almost 20 crore family members.

Invoking prime minister Narendra Modi’s recent speech in Jammu and Kashmir (J&K), in which he asked the youth to chose tourism over terrorism, the organisation said, “Displacing such a large population from tourism jobs will run the risk of a nationwide unemployment, roughly estimated at a million-plus, with the consequent risk of pushing this working population towards undesirable activities to earn their and their dependents' livelihoods.”

FAITH added that almost nine million tourists visited India, resulting in almost 27 million foreign visitations across Indian states. These, along with around 1.8 billion domestic visitations, frequented a significant portion of these establishments as guests.

“All of this will be put to risk if the overall food and beverage experience is compromised at such legitimate establishments, which pay direct and indirect taxes and levies to both the Central and state governments,” it stated.

After decades of independence, India, despite all its natural geographic and cultural heritage, still has only 0.67 per cent of the tourism market share, which will get reduced drastically if this happens,” said the organisation in its statement.

FAITH claimed that India has less than an estimated 0.5 per cent of the global share of this sub-sector of tourism, which will see large-scale cancellations. That has already started happening.

Tourists, who bring in foreign exchange worth over $20 billion, will reduce their coming to India, and a large number of Indians will increasingly prefer travelling out of India for such events, leading to a major outflow of foreign exchange.

“The tourism industry requests that on a retrospective basis, any damaging impact on investments in fixed capital assets and on large-scale employment should be reconsidered, while strictly ensuring enforcement, through effective policing, for the very noble social cause and goal of preventing drunken driving with zero tolerance,” FAITH stated.

India’s tourism, travel and hospitality is estimated to contribute to approximately $200 billion, about 9.5 per cent of India's gross domestic product (GDP), about five crore employment, approximately nine per cent of Indian employment, over $30 billion investment and about 5.5 per cent of the total capital investment in India. This capital investment is immobile and cannot be driven by decisions which challenge their business models on a retrospective basis.
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