SC's highway liquor ban is disastrous. Will kill hospitality sector, hit one million jobs
"Tourism creates jobs. Why kill it? SC's highway liquor ban verdict may hit one million jobs." This tweet of Amitabh Kant, CEO, NITI Aayog, and the creator of the Incredible India campaign, highlights the most important fallout of the Supreme Court's judgment banning the sale and service of liquor within 500m of national and state highways.
Tourism creates jobs.Why kill it? Supreme Court’s highway liquor ban verdict may hit 1 milln jobs https://t.co/oV6c84YEzU via @economictimes
— Amitabh Kant (@amitabhk87) April 2, 2017
The uncomfortable truth is that the order cannot be challenged, so the trade associations that came together on the issue on April 2, have chosen to lobby with the tourism ministry at the Centre and the state governments, which are custodians of the liquor trade, to set remedial steps in motion. Together, they hope to address their biggest challenge.
The immediate trigger for the PIL that led to the order - the mushrooming of liquor vends on national highways - won't ever be addressed because these vends (or for that matter, toddy shops and shacks), which operate on government-owned land, can easily be relocated to distances greater than 500m from their nearest highways. Hotels and restaurants don't have the luxury of doing so. They, therefore, will be left facing the brunt of the order.
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| Banning the sale of liquor on the highways is the easy way out - and there's an easy way of circumventing it. |
The travel and tourism sector, which includes restaurants, bars and liquor vends, employs more people than most sectors in the country. The food services sector alone provides direct employment to 5.8 million people, and indirect employment to another 7.5 to 8.5 million, and the two numbers are likely to rise to 8.7 million and 9.5-10.5 million by 2021, making it one of the largest employers in the country (providing livelihood to 1.6 times more people than the Railways and 23 times more than Bollywood!). These are figures from Technopak's India Food Services Report 2016 commissioned by the National Restaurant Association of India (NRAI).
On April 2, eight travel, hotel and restaurant trade associations joined hands at a media briefing called for by Vikram Oberoi, Managing Director and CEO, EIH Limited, and President, Hotel Association of India (HAI). The associations were World Travel and Tourism Council-India Initiative; Federation of Associations in Indian Tourism & Hospitality (FAITH), which itself is a conglomeration of ten trade associations; Federation of Hotel and Restaurant Association of India (FHRAI); NRAI; HAI; Indian Association of Tour Operators (IATO); Travel Agents Association of India (TAAI); and the Association of Domestic Tour Operators of India (ADTOI).
The media was addressed by Dipak Deva, Chairman, WTTC-India Initiative; Arjun Sharma, Co-Chair, Tourism Committee, Confederation of Indian Industry (CII); Sarabjit Singh, Vice Chairman, FAITH; Rahul Singh, General Secretary, NRAI; Ankur Bhatia, Executive Director, Bird Group of Companies; and Kapil Chopra, President, The Oberoi Group.
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| The travel and tourism sector, which includes restaurants, bars and liquor vends, employs more people than most sectors in the country. |
Last night, in an informal conversation, Kapil Chopra pointed to the human cost of the ban. He said two of the chain's hotels - Trident Gurgaon and The Oberoi Gurgaon - may be in the shadow of the order, but The Oberoi Group has 26 other hotels to keep its cash registers ringing. Those who'd be hurt, however, would be the staff of the two hotels. Similarly, Chopra said, three Lemon Tree Hotels properties have had to go dry. "The group will survive and grow, but add up the human cost of three hotels suspending their bar operations," he added.
Speaking after the media briefing, Arjun Sharma said: "We do respect the noble intention of the honourable Supreme Court to make our country's roads safer, but it is still a Black Day for us. The judgment will have a huge social and economic impact. It has serious revenue implications for state governments. We have to find a solution within the law."
Rahul Singh, who has been the face of the NRAI's opposition to the liquor ban judgment, said it flies in the face of tourism-friendly initiatives of the government such as the introduction of e-visas. "International tours and events are planned months in advance, and it will seriously hurt India's image if we go back to international tour operators and event management companies and say that certain hotels and restaurants in the country can serve alcohol, and others can't," Singh said.
Chopra cited a real example from the two Oberoi Group hotels in Gurgaon that are likely to be hit by the order. The American Express global leadership is checking in at the twin hotels to honour its top two performers. From a corporate business point of view, it is a prestigious "guest movement", but now Chopra is getting panic calls from his American Express contacts asking him where they can host their cocktail receptions. Certainly not in Gurgaon. "Is this what India means when it talks about the ease of doing business?" Chopra asked.
This is one judicial pronouncement that is class-neutral. It has placed in jeopardy the future of not only bars and restaurants in five-star hotels, and in prestigious addresses such as the 140-year-old Cosmopolitan Club in Chennai and the Indian Accent and Friends Club in New Delhi, but also humble liquor vends and permit rooms (15,699 of them in Maharashtra alone!), and humbler toddy shops along Kerala's highways - 1,080 of them out of a total of 5,100 will now have to shut shop, or relocate.
And of course, like anything Indian, the fallout of the order brings in its wake its own bag of surprises. For instance, many of the arterial roads in our cities (some of them iconic) merge with national highways. Anna Salai, for instance, is on NH-45, so the hotels and restaurants on it are in the shadow of the ban.
Likewise, The Suryaa and The Manor (NH-19), and Hyatt Regency New Delhi, Radisson Blu Plaza Mahipalpur and the New Delhi Aerocity hotels (NH-48) are all city establishments having to pay the price of their proximity to national highways. And then there's the instance of Madhya Marg in Chandigarh, a state highway, which has been the worst hit by the Supreme Court order.
If these hotels are to be banned from serving alcohol because they contribute to drunken driving, then Delhi (or for that matter, the entire country) should be made dry. And if the order is implemented in letter and spirit, then, as Rahul Singh points out, the entire Panipat will have to be declared dry because it is built around a national highway. "We must not forget that our highways came after the cities. They had to cut through the cities," Singh pointed out.
Just to jog your memory, let me append what I wrote yesterday about how the Supreme Court's judgment creates an avoidable impediment for a sector of the economy that's been providing lakhs of jobs, thousands of crores of rupees worth of revenue, and international tourists a reason to visit India. It has been a sector that's been growing phenomenally and creating a positive buzz nationally.
The learned judges, while justifiably attacking the menace of drunken driving, have hit at the hotel and restaurant business, whose patrons normally wouldn't include truckers, where it hurts the most.
The learned judges have made the playing field for the hospitality sector uneven by giving hotels and restaurants beyond the 500m barrier an unfair advantage. By stripping hotels within the 500m limit their right to serve alcoholic beverages, the judges unwittingly cast a shadow on their rooms business (for an international corporate traveller, moving into a hotel that doesn't serve alcohol is the equivalent of being asked to go to Saudi Arabia) and also the booming business of marriages, where liquor flows generously in the pre- and post-nuptial functions.
For restaurants, it means the end of the road, for it's an established fact that any restaurant that is not a part of a fast food chain, starts attracting footfalls only after it gets a liquor licence. Worse, all the affected restaurants in Delhi and Haryana have just completed paying for their annual licence renewals, which they assumed would be protected after the arguments articulated by Attorney General Mukul Rohatgi in their favour in the run-up to the judgment.
The learned judges have ignored one of the original intentions behind building the national and state highways, an idea dear to former prime minister Atal Bihari Vajpayee. These were to become the arteries of a New India, the foundation of its infrastructure thrust, and also result in the development of the hospitality sector in areas that were under-served by it.
The learned judges have not taken into account the reasonably logical argument that drunken driving has less to do with the availability of liquor on the national and state highways, than with the poor enforcement of the laws.
The Centre and the state governments have to answer for how much they have (or haven't) invested in making our highways safe. Why have they not created a strong network of well-equipped, well-connected highway patrol units with the power to take action against drunk driving and other violations of the traffic laws on the highways?
Banning the sale of liquor on the highways is the easy way out - and there's an easy way of circumventing it. In Goa, for instance, the owners of highway vends are moving into the nearby villages to dodge the 500m rule. It's not physically possible for hotels and restaurants to relocate with such ease. They have to suffer in silence.