Kerala prohibition policy: Revenue from liquor sales could help state deal with its massive debt
Liquor, which brought about Rs 12, 000 crore to the state a year, is a major source of the government’s revenue. Kerala which grapples with a public debt of Rs 1.35 lakh crore cannot absorb such a huge loss in revenue.
The Communist Party of India (Marxist)-led Left Democratic Front (LDF) government's move to review the previous government's phased prohibition policy in Kerala has not created big ripples across political circles in the state.
Barring Kerala Pradesh Congress Committee (KPCC) president VM Sudheeran, who incidentally imposed the policy on the United Democratic Front (UDF) government by refusing to allow the renewal of the licence of 418 ‘substandard’ bars on the eve of the 2014 Lok Sabha polls, no other senior leaders of the Congress or its allies has come out strongly against the LDF move.
Sudheeran’s suggestion to conduct a referendum before reversing the policy has not been taken seriously by either LDF or the UDF since they consider the assembly poll, in which the LDF captured power by winning 91 of the 140 seats in the Assembly, itself as a big referendum.
Former Home Minister and current Opposition leader Ramesh Chennithala had even termed the policy as a failure as it did not make the desired impact and called for changes in the policy. Ramesh’s statement has emboldened the LDF, which had taken an ambiguous stand on the policy during the election, to revisit the policy.
Excise Minister AC Moideen prepared the ground for changes in the policy that sought to make Kerala liquor-free by 2023 by making a strong case for reopening the closed bars in at least major tourist destinations, citing fall in foreign tourist arrivals, especially in the MICE (Meetings, Incentives, Conferencing and Exhibitions) sector.
Excise Minister TP Ramakrishnan backed him saying that the long queues in front of the retail outlets run by state-run by Kerala State Beverages Corporation and Kerala State Co-operatives Consumers’ Federation (Consumerfed) was a disgrace to the 100 percent literate state. He also cited a huge rise in drug consumption in the state to buttress his argument for reopening the closed bars. However, neither of them called for a total reversal of policy, under which all 713 liquor bars below the five-star category and 20 percent retail outlets were shut down till 1 October, 2015 even when the LDF maintained that abstinence was their policy.
The statements by the two ministers are viewed as a move to reopen all bars attached to four-star hotels and stop further closure of retail outlets. The closure of the next bench of 10 percent retail outlets is due on 1 October, 2016. A hectic move by three star hotel owners to upgrade their hotels is seen as a reflection of the positive signals they have got from the LDF government on its liquor policy. The excise minister said that the government will formulate the policy due on 1 April, 2017 in consultation with all concerned.
Former Congress MLA TN Prathapan, a strong proponent of total prohibition, views the move the result of a deal the LDF had reached with the bar owners before the assembly elections. He told the Firstpost that the bar owners, who had tried to dislodge the UDF government by raising bribery charges against several ministers of the Oommen Chandy cabinet, had flowed money to ensure the defeat of the UDF in the assembly polls.
“The LDF had run an extravagant campaign for the election with the help of funds given by the bar owners. They had taken the money by giving an assurance that they will reopen the bars if they come to power. The LDF has been speaking about the reviewing the UDF policy as part of this assurance ever since they assumed office,” said Prathapan, who is a close confidante of Sudheeran.
He said that the LDF leaders were not speaking about the total reversal of the policy as they may have realised the actual impact of the policy on the people and the society after they assumed office. He said that the figures furnished by the excise minister in the Assembly regarding substantial reduction in hard liquor consumption were contrary to the statements given by the LDF leaders outside.
“The LDF government had also acknowledged steep fall in liquor-related crimes, including domestic violence, and road accidents following the introduction of the phased prohibition. This is the reason why they are not ready to reverse the policy totally. If they do they know the people who are benefited by this will not tolerate it,” Prathapan said.
The Congress leader said that his party will mobilise the people against the government if they dilute the policy. He said that the tourism minister’s argument that prohibition had affected tourism was baseless.
“Tourists are not coming to Kerala to drink liquor. They visit the state to enjoy its natural beauty and cultural heritage. This will become clear if the government orders a social audit of the transactions of the star hotels in the last 10 years,” Prathapan said. Father TJ Antony, general secretary of the Madhya Virudha Samithi of Kerala Catholic Bishops Council (KCBC) also backed Prathapan saying that the numerous awards the Kerala tourism received at the national and international level this year was an indication that the tourism was not hit by the liquor policy.
Political commentator Jacob George believes that the LDF government will ultimately implement its own policy, which is abstinence and not prohibition. He told the Firstpost that the LDF government had no obligation to bear the burden of a policy born out of political intrigues. “The policy was imposed by Sudheeran as part of his own political agenda. The UDF government had announced the policy without due deliberations within the ruling front and consultations outside. A policy not based on consensus will not stand the test of the time,” said Jacob.
He said that LDF was not only concerned about the impact of the policy on tourism but also the serious dip in the revenue and loss of livelihood to thousands employed by the liquor industry. Liquor, which brought about Rs 12, 000 crore to the state a year, is a major source of the government’s revenue. Kerala which grapples with a public debt of Rs 1.35 lakh crore cannot absorb such a huge loss in revenue. "The LDF has been opposing the prohibition saying that it had failed wherever it was implemented. Will they implement a policy that they strongly believe will not succeed? I don’t think they will," says Jacob.
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