The Hindu : Karnataka / Bangalore News : Ban on arrack will leave over one lakh people unemployed

Online edition of India's National Newspaper
Friday, Jan 12, 2007
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Karnataka

Karnataka - Bangalore

Ban on arrack will leave over one lakh people unemployed

Nagesh Prabhu

Decision will also cause huge revenue loss to the Government

BANGALORE: The Government's proposal to ban the manufacture and sale of arrack from April 1 will render over a lakh jobless and cause considerable revenue loss to the State exchequer.

Official sources told The Hindu that about 39,000 people were employed in the 13,000 authorised arrack shops across the State.

There were over 25,000 unauthorised shops and they had provided employment to at least 75,000 people. Contractors had hired three people, most of them illiterate, in each arrack shop.

About 700 people absorbed by private enforcement agencies and 600 workers engaged in transportation of arrack would also stand to lose jobs.

The next couple of months in the run-up to the State Budget 2007-08 would be spent in debating the ways and means of implementing the ban and framing policy, officials said.

The State Government had already conducted a study on the pros and cons of the ban.

Dalit and women organisations and self-help groups have welcomed the State Government's move on the ground that arrack had destroyed many poor families.

States such as Andhra Pradesh, Gujarat, Haryana, Kerala, Manipur, Mizoram, Orissa, Rajasthan, Tamil Nadu and Uttar Pradesh imposed ban on sale of arrack on several occasions since 1983. But none of them was successful in imposing a total ban. Karnataka had never imposed such a ban.

Ban was imposed on arrack in Haryana between 1995 and 1998 and it was later lifted.

Monitoring

Leader of the Opposition in the Legislative Assembly N. Dharam Singh has said that the arrack business is confined to the unorganised sector, which makes it difficult for the enforcement agencies to monitor the ban and control the business effectively. It is viewed that ban will give scope for bootleggers and operation of a parallel black market.

Industry plea

The liquor industry wants the manufacture and sale of arrack to be discontinued as the entire range of alcoholic products can be distributed through the Karnataka State Beverages Corporation Limited.

This will minimise revenue leakage.

In fact, a few months ago, the Association of Distillers, Brewers and Vintners of India (ADBVI) had urged Deputy Chief Minister B.S. Yediyurappa to ban the sale of arrack in the State.

The liquor industry wants replacement of arrack with cheap Indian-made foreign liquor (IMFL) to be sold at a low price with low rates of duties and taxes.

The practice has been successfully followed in some States, where excise revenue has increased after the ban on arrack. The collection of revenue through the sale of arrack was Rs. 1,037.21 crore in 2003-04, Rs. 1,257.55 crore in 2004-05 and Rs. 1,565.40 crore in 2005-06.

The estimated revenue from excise in 2006-07 is Rs. 3,347 crore against the collection of Rs. 3,414.94 crore in 2005-06, according to official sources. More than 50 per cent of the revenue in the excise portfolio comes from the sale of arrack.

Out of the Rs. 3,414.94-crore excise collection in 2005-06, arrack contributed revenue of Rs. 1,565.40 crore. Liquor revenue was Rs. 1,425.45 crore, and that of beer Rs. 239.18 crore.

In the collection of monthly rental, the Bangalore Urban district contributes the highest revenue from sale of arrack (Rs. 16.50 crore), followed by Bangalore Rural (Rs. 9.08 crore), Mysore (Rs. 8.50 crore), Bellary (Rs. 7.56 crore) while Gadag district's share is the least (Rs. 1.44 crore).

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