Highway or my way: How states are getting around SC’s liquor ban

The clarification from the honourable Supreme Court that its December 15th order to ban liquor vendors within 500 meters of national and state highways also applied to hotels and highways, has hit the hospitality industry badly. They are stunned by the order of the Supreme Court and have estimated that about 1 million employees of the hospitality industry could be affected because of this ban. The question that we can ask though is the one, which Amitabh Kant, CEO, NITI Aayog, and the creator of the Incredible India campaign is also asking, that is ‘tourism creates jobs, why kill it?’

The travel and tourism sector employs more people compared to all the industries. The food, restaurants and bars and liquor are a major part of travel and tourism sector. According to a report by dailyo.in 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).

With around 1 million jobs and estimated loss of around Rs 65,000 crore of revenue at stake the state governments had to step in. The order of the Apex Court cannot be challenged so the trade associations have decided to come together and lobby with the tourism ministry at the centre and the state government.

The states are now thinking of converting stretches of state highways into urban roads and by lanes to get around the ban on liquor sales, but the down side to that is that the state will have to pay for the maintenance and operation of those stretches.

Here is what some of the states are doing to get around the Supreme Court order.


On March 22, Rajasthan PWD de-notified certain state highways as urban roads or districts roads. Excise duty is one of the biggest revenue generating sources of Rajasthan just like most of the other states in the country. The state de-notified 21 state highways in 16 districts allowing the liquor vends to function as regular.


Punjab government de-notified 30 km stretch of state highways, making them an urban road. The state de-notified saying that these roads used to be a part of the state highways but post the construction of the bypass to tackle the traffic in the city, these roads are not a part of the state highway.


On Sunday, around 500 bars and restaurants serving liquor were shut, which obviously amounted to a loss in business. The state however is looking at de-notifying sections of state highways in order to get around the ban. In Jalgaon and Latur stretches of 20.52 km and 44.1 km have been de-notified and the PWD ministry has received similar proposals from PWD officials of Yavatmal, Pune and Jalna districts.


The hoteliers in Chandigarh have already claimed losses of Rs 3 crore in the first weekend itself and are requesting the UT to declare certain stretches of the state highway to be de-notified. According to a report by the Indian Express, the Chandigarh Administration, 20 years ago had declared all the major roads in the city as state highways in order to receive funds from the Centre. The administration formed a team to review the classification of these roads; the team gave a green signal to go ahead with the de-notification. The decision was later challenged by Harman Sidhu, president of NGO arrive safe, and who had filled the initial petition in the Supreme Court. The hearing of the same is on 17th April in the Supreme Court.


Goa did not seem in a hurry to de-notify the state highways as yet, since the infrastructure in the state can take a hit if the state highways are de-notified since the funds will stop coming in. However, chief minister Manohar Parrikar has said that 1,000 bars that exist beyond 220 meters, where licences can be renewed. The remaining 2,200 for now will be allowed to shift. The state will not charge transfer fee.


Due to Haryana’s geographical composition most of its roads are national highways, and that is the reason why even de-notifying the road won’t help. Most of the hotels and restaurants in its prime cities like Gurgaon, Panipat, Karnal and Faridabad are on close quarters to the national highway. The Additional Secretary said that the government will consider the hotel and restaurants owners’ demand and take a decision as soon as possible.

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