High and Dry

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War over bars Kerala PCC chief VM Sudheeran (left) and Chief Minister Oommen Chandy
War over bars Kerala PCC chief VM Sudheeran (left) and Chief Minister Oommen Chandy

Even as Kerala takes baby steps towards becoming a ‘dry state’, controversies continue to rain over God’s Own Country, giving new twist to the ongoing war over bars.

On 21 August, Chief Minister Oommen Chandy called for a meeting of the Congress-led United Democratic Front (UDF) at his official residence. With a blank face, he read out the decision of banning bars and turning Kerala into a liquor-free state within a decade. Senior leaders such as Finance Minister KM Mani and Industries Minister PK Kunhalikutty welcomed the decision. PCC chief VM Sudheeran looked like a defused bomb as he realised Chandy’s smart game plan. Home Minister Ramesh Chennithala kept his cool and congratulated the chief minister.

Though Finance Minister Mani will bear the brunt of the decision, he could not resist the move as the Church had been demanding prohibition for long. Kunhalikutty did not oppose the move either as his party, the Indian Union Muslim League (IUML), considered alcohol as taboo.

So, what prompted Chandy to take the decision? Nobody has a readymade answer. The CM had been at the receiving end ever since the Comptroller and Auditor General (CAG) asked for the cancellation of 418 bar licences. Since then, his arch rival Sudheeran had played a populist card saying the bars should not be reopened.

In its veiled editorials, IUML mouthpiece Chandrika had regularly attacked the CM, alleging that he was safeguarding the interests of the liquor lobby in the state. Both the IUML and Kerala Congress (Mani), prominent allies in the UDF, kept a safe distance from the CM. So, Chandy decided to bottle his political rivals by going for a complete liquor ban. He opted for the shortcut as a means to entrap his rivals and establish his supremacy. After all, being a teetotaler, he had nothing to lose.

“The chief minister tried his best to reason with everybody on the issue of reopening the 418 bars, which were closed after the CAG indicted them for violating the required norms for their operation,” says a Cabinet colleague on the condition of anonymity. “But nobody listened to him. They used the issue as an opportunity to hang him in public. Now we are going to face its causality for playing double standards in public lives.”

The minister is worried on two counts — the war over bars has paved the way for new group equations within the party, and the ban is going to severely affect the state’s coffers.

After the decision became public, Excise Minister K Babu, who is a Chandy loyalist, hit back at Sudheeran for criticising the advocate general on the bar licence issue. Babu reminded the media that being a minister, he could not make irresponsible statement like some politicians who wanted to make headlines.

The next day, Sudheeran retaliated by saying that he has every right to criticise the advocate general or the government when they are wrong. Later, Minister KC Joseph too joined the shadow boxing, saying criticising the advocate general was not a good practice as he was presenting the government’s view before the high court. Soon, Congress MLA TN Prathapan came forward to defend Sudheeran, attack Babu and blamed the attorney general for losing many cases in the high court. All these public statements revealed the fissures within the party.

Even after the decision was announced, the government could not do much. The excise minister said that the remaining bars would be shut only after 12 September. “We would be issuing a closure notice from 27 August onwards and offer a 15-day deadline for the bars,” he said. “We received legal opinion that without issuing proper notices, the court may strike down the ban.”

His statement revealed that the government had not done its homework before announcing the decision. Even Excise Commissioner X Anil was not aware of the move. “We were never consulted,” says Anil. “Technically, the cm is free to take any decision. But it would have been prudent if the government had conducted a study on the liquor ban and analysed its implications on all sectors. At least the current mess could have been easily avoided.”

Additional DGP (intelligence wing) A Hemachandran warned the state government that the immediate closure of bars before the festival of Onam would lead to hooch tragedies. In his report, he listed various problems in the monitoring mechanism of illicit liquor sale.

Even the excise department has no clue about how to handle the liquor ban. “We have decided to return around Rs 40 crore collected as licence fees as well as take stock of the liquor that remain in the bars,” says an excise official. “We don’t have enough staff for all these tasks.”

According to the finance department, the move to ban liquor will severely affect the state coffers. “If the government decides to close 10 percent of BEVCO outlets every year, the state may lose around Rs 828 crore in excise duty and sales tax revenue,” says a finance ministry official. “When the remaining 312 bars are shut down, the state may lose another Rs 2,200 crore as 35 percent of the liquor sales are through bars. The state will lose another Rs 176 crore as licence fee.”

But Finance Minister Mani has claimed that the state stand to lose only around Rs 1,811 crore every year.

However, Planning Board member and Communist Marxist Party leader CP John does not believe that it is a realistic estimate. “I fear an annual revenue loss of at least Rs 4,000 crore, which may create a vacuum in the state’s finance management. If you take into account the impact on the tourism industry, it may triple the loss.”

More than the revenue loss, what worries John is that the state government does not have adequate machinery to execute the liquor ban. “It is going to create a new mafia in the state as the demand for liquor cannot be controlled with an executive order or a public statement,” he says.

Meanwhile, the state government has decided to open more beer and wine parlours to save the tourism industry, which has an annual turnover of Rs 23,000 crore.

“The UDF government’s decision to ban bars and restrict the sale of liquor is going to harm the state in the long run,” says Thomas George, a businessman based in Kochi. “The short-term vision of the Congress leaders will put Kerala’s long-term future at risk. These leaders have only one agenda — stay in the media limelight. The ban is going to have a big impact on financial institutions that gave loans to the hotel industry. The state-run Kerala Finance Corporation alone has given Rs 780 crore as loans to bars and hotels in the state.”

Interestingly, a small section of liquor fans have cheered the Chandy government’s move. “Now, we will start distilling liquor from home,” says Anthony Silva, an entrepreneur from Pozhyur. “It is an easy and profitable process. See, necessity is the mother of all invention.”

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