Karnataka's excessive dependence on excise tax for its revenue generation, has left the state government in a lurch. While the Supreme Court order calls for shutting down liquor shops falling within the 500-metre radius of the national and state highways before June 30, the state government has found a way to circumvent the apex court order to secure its revenue—an estimated Rs 16,000 crore per annum.
A day after the state cabinet approved a proposal to denotify the stretches of the national highway running through the urban local body limits, Chief Minister Siddaramaiah, in his reply to the Legislative Council on Thursday, said the state highways would be denotified and declared as urban roads or city local authority roads, and a proposal seeking denotification of national highways would be sent to the Centre shortly.
Karnataka has around 6,015 liquor shops. Of these, as many as 2,708 shops are along the national highways and 3,307 shops on state highways. The estimated annual revenue from excise tax is Rs 16,000 crore, which the opposition parties feel is the reason for mooting denotification of the highways.
Interestingly, the state government hopes to denotify 858 km (against a total of 6572 km) of the national highways that pass through ULBs for "better maintenance", though the Siddaramaiah government is drawing flak for pathetic road conditions even in the state capital. The SC order, aimed at reducing accidents caused due to drunken driving, is being weighed against the revenue loss incurred due to closing down the liquor shops.
"Prohibition of alcohol is not pragmatic as drinking is an addiction. But has prohibition imposed in the BJP-ruled Gujarat worked?,” asked Siddaramaiah.
“The ban of these shops is not pragmatic as drinking is an addiction. In the past, during J.H. Patel's tenure as CM, we have studied the feasibility of prohibition. After we banned arrack, many families came to the streets and we have not been able to rehabilitate them. The denotification of highways will help bail out thousands of people dependent on the liquor shops for their livelihood,” said Siddaramaiah, amid apprehensions among even the Congress members over the legal tenability of the proposal.
While, several other states including Andhra Pradesh, Telangana and Tamil Nadu have made similar proposals (to denotify highways) citing it would affect tourism and also deprive many families a livelihood, Karnataka government has noted that post-demonetisation the revenue collection in the state has slumped owing to a dip in stamp duty collection on properties and now the ban on liquor shops would seriously impact revenue generation.
