AP: WRONG BAR CODE
Why Naidu’s decision to tweak bar rules post-GST could backfire
The Chandrababu Naidu government’s bid to increase revenue from liquor sales by tweaking the excise policy on June 23 has turned up the political heat in Andhra Pradesh.
Anticipating huge revenue losses from the Goods and Services Tax (GST), the state government had quietly amended the rules for bars. First, bar licences were made valid for five years instead of one. Second, effective from July 1, the annual licence fee for the 746 bars in the state has been reduced to Rs 2 lakh, which on a staggered scale could otherwise be as high as Rs 28 lakh in a city with a population of over half a million. This difference in amount will now be collected as ‘non-refundable registration charge’—thus evading payment of GST to the Centre of about Rs 1,000 crore, according to one estimate.
Also, after the Supreme Court’s restriction on sale of liquor along highways
came into force, the state government re-designated sections of highways as ‘urban, major and district roads’. While the move helped add a hundred-odd liquor vends to the system, a related order now permits round-the-clock beer parlours and bars in shopping malls.
The Naidu government’s bid to secure revenues, however, has presented the opposition YSR Congress with an opportunity. At a plenary session of the party on July 9, YSR Congress chief Y.S. Jaganmohan Reddy vowed to impose prohibition in Andhra Pradesh if voted to power in 2019. Reddy was clearly wooing rural women, who have been protesting against liquor shops in residential areas for the past two months.
The ongoing anti-liquor agitation has echoes of a similar campaign in the 1990s that had forced then chief minister N.T. Rama Rao to introduce prohibition. This was, however, diluted over time and finally scrapped when Naidu dislodged his father-in-law Rao to seize control of the TDP. Liquor used to be the second biggest revenue source in undivided Andhra Pradesh through the 1990s. Much of it was used to finance welfare schemes, including NTR’s Rs 2 a kilo rice scheme.
Now, with the anti-liquor chorus rising and the YSR Congress intent on exploiting the public anger, Naidu could find himself in trouble.
THE CM’S BID TO SECURE REVENUES FROM LIQUOR HAS GIVEN YSR CONGRESS AN OPPORTUNITY