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Bengaluru's hotels and bars go dry; state faces loss of revenue, image, tourism and business

While India ushered in the historic Goods and Services Tax (GST) regime at the stroke of midnight on Friday, Bengalureans sang a soul-stirring dirge, mentally at least, to hundreds of the city's famed pubs which were ushered out.

After last-minute efforts by Chief Minister Siddaramaiah failed to save the city from the Supreme Court ban on liquor outlets that came into effect from 1 July, about 600 pubs, bars and liquor shops located within 500 metres of highways will go dry.

These include bars at 19 star hotels which attract foreign business visitors in droves every day. Few Western visitors would relish a "bar-closed" notice in hotels where they stay, and nothing less than panic has gripped the hospitality and software industries in India's IT capital.

Representational image. AFP

Representational image. AFP

Though most of India reconciled to the consequences of the SC ban long ago, the realisation that more than a third of Bengaluru's liquor establishments stand to lose their licences dawned very late on their owners and on the state government. That's because nobody really thought that vast stretches of important thoroughfares in Bengaluru, totalling 78 km, are actually parts of six national highways. And that doesn't speak much about the state government's professed business-friendly policies and breakneck efficiency.

The city will retain its title of India's pub capital, as argued in a previous article, since the pubs that will survive are still large in number. But Bengaluru is also India's IT showpiece, and the liquor ban will deprive the city of some more of its sheen.

Software business leaders from the West, who swarm Bengaluru like bees around a hive, have been thumbing their noses at the city's potholed-roads, insufferable traffic chaos and corruption. Now the disappearance of liquor at star hotels will be added to their litany of woes, and Bengaluru's brand image will take a further hit. Companies will find it tough to explain why liquor, part of the diet of their foreign guests, can't be served in a city that claims to be a world-class software hub. It wouldn't be easy for them to understand why the Supreme Court's none-for-the-road liquor policy aimed at truck drivers should be implemented inside hotel bars. The ban originally came as a verdict on a public interest litigation that sought to curb accidents on highways due to drunk driving.

Many five-star hotels, including ITC Windsor, Lalit Ashok, Le Meridien and The Oberoi, are located on Ballari Road, MG Road and Hosur Road, which were discovered to be highways.

"It came as a quite a shock to us to find that the road we are on is a highway," said Le Meridien's general manager Suresh Badlaney, according to a report in The Times of India.

Managers of many other star hotels are afraid that advance bookings already made will soon be cancelled.

Pubs, bars, liquor shops and restaurants serving alcohol have the option of relocating — lock, stock and, literally, barrel — to places more than 500 metres away from the highways. But it's nearly impossible for large big star hotels to shift places. They are bracing themselves for a 50 percent fall in their occupancy rates and at least a 40 percent slump in revenues.

The crisis can be resolved only if the Centre agrees to "denotify" the highways that crisscross Bengaluru and reclassifies them as city roads. Union surface transport minister Nitin Gadkari has excused himself from a request from Siddaramaiah to that effect.

The other question that needs answering is why did it take so long. The ban was known one and a half years ago, but the state's excise officials still seemed surprised until last month that some of the city's arterial roads are actually highways. It was only two weeks ago that they seriously got into the job of measuring distances between liquor vendors and roads. And as late as last week, they were busy consulting legal experts.

What's worse, officials of the Bruhat Bengaluru Mahanagara Palike (BBMP) began to dust off ancient files to confirm if some of the roads, whose upkeep the city has been paying for, were indeed highways. To the question on who pays or who should pay for maintaining highways passing through cities, they have no ready answer.

And all along, excise officials had maintained that several high-profile clubs in the city, including Bowring Institute and Bangalore Club and Century Club, fell within the ambit of the ban. But only two days before the deadline, it struck them like a divine epiphany that the clubs cannot possibly come under any such restriction since they served liquor only to members and not to every passerby who dropped by, leave alone highway truck drivers.

All establishments that have closed down, from pubs to five-star hotels, are hoping against hope that the Centre will denotify the highway stretches in the city. What makes them optimistic is that Gadkari reportedly told Siddaramaiah that he couldn't possibly decide on Karnataka's request alone, since similar demands have came from other states as well and that his ministry might take a comprehensive look at the situation some time in the future.

The government also needs to worry about two other collateral effects of all this. While hundreds of bartenders and DJs will lose jobs, the state, already strapped for cash, will suffer a huge revenue loss. The state was targeting an excise revenue of Rs 18,000 in 2017-18 against the Rs 16,484 crore of 2016-17, but is likely to fall short by at least Rs 5,000 crore.

Updated Date: Jul 01, 2017 17:05 PM

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