In an attempt to create a truly global business ecosystem, the Gujarat government, in a noteworthy development, lifted liquor prohibition in the Gujarat International Finance Tec-City (GIFT City) area in Gandhinagar. Under the new policy, hotels, restaurants, and clubs in the GIFT City area will be given permits for 'wine and dine' facilities. While liquor can be consumed in these facilities, they will not be allowed to sell liquor bottles. A liquor access permit will be provided to all employees, owners and officials working in GIFT City. This means those officially working in GIFT City area and their official guests will be able to go to such hotels, restaurants and clubs for wine and dine facilities as per the new rules.
The industry and the business fraternity are looking at it as a welcome change to attract national and international companies and talent in the GIFT City while the opposition Congress in the state has termed it as a retrograde step towards 'cultural erosion'.
This is a big step for the Gujarat government as it has been a dry state since it was carved from Mumbai State and created in 1960. The state government has been rigorous about laws pertaining to prohibition for the locals, who can get liquor permits only on health grounds, that too just for people above 40 years of age. In 2017, the liquor law was made stricter with punishment up to 10 years along with a fine of Rs 5 lakh for manufacturing, purchasing, selling or transporting liquor.
At the same time, the government was cognizant of losing revenue both in tourism and business. So, in 2006, the state government through an enactment allowed outsiders to obtain liquor permits from authorised liquor stores on the basis of their travel tickets. There are around 60-65 hotels and clubs that have been given temporary licences for liquor shops to serve tourists.
To boost the state's economy through foreign investments, the Gujarat government set up Special Economic Zones (SEZs) in the last decade. GIFT City is one such SEZ, with an integrated development on 886 acres of land which includes ultra-modern office spaces, residential apartments, schools, proposed hospital, five-star hotels and business club. GIFT City also happens to be India's first greenfield smart city and International Financial Services Centre (IFSC) being developed on the lines of Singapore and Dubai. The central government implemented a major financial sector reform by establishing and operationalizing India's maiden International Financial Services Centre (IFSC) in GIFT City. As of June 2023, there are 23 multinational banks; 35 fintech entities; two international stock exchanges with average daily trading volumes of $30.6 billion; as well as India's first international bullion exchange with 75 operating jewellers. There are more than 20,000 people working in GIFT City. However, despite these developments, GIFT City continued to be a deserted place after office hours with not much to offer in terms of entertainment. In fact, in 2022, the Singapore High Commissioner in an interview had called the GIFT City as a 'ghost town after working hours'.
"I am sure this step will be welcomed by those who are visitors to the state on business trips. They can relax and have a good time after a long day of hard work. It's not about getting drunk but for some people, it's a cultural thing. It will go a long way in attracting expatriates to Gujarat," says Marina Bhandari, an expat staying in Gandhinagar.
Explaining about the effort, Ms Bhandari says, "For an expat like me, it will be absolutely wonderful to go out and have a drink instead of worrying about renewal of permit and stocking up."
In 2020 itself, the GIFT management had written to the superintendent of prohibition and excise seeking a relaxation in liquor laws in the special economic zone (SEZ) area of the GIFT City. The request was to enable 'evening public social life', at par with what is enjoyed by professionals in other finance and technology hubs in India and abroad, said sources in the government. "Since 2021, the state government has been thinking on the proposal to relax prohibition rules in GIFT City. This has been initiated to entice national and international fintech firms to set up offices and to get top talent to shift base to the state capital," said a senior government official.
Since liquor is out of purview of GST, it will attract state VAT and excise duty which will earn revenue for the state. Also, liquor comes under the category of 'sin goods', it will be taxed heavily. Revenue will be generated by the GST department also due to thriving food business at the liquor serving restaurants and hotels in the GIFT City.
However, there is also a view that uplifting prohibition in GIFT City will have its negatives. Law and order and safety of women in the state which is one of the best in the country may be impacted. So may road accident cases.
Shaktisinh Gohil, Congress MP from Gujarat said, "Gujarat's ethos will get impacted. It's unfortunate that the BJP government has decided to lift the ban on prohibition in GIFT City. God knows what's the compulsion. Who has paid and influenced them to lift it in the GIFT city when the prohibition prevails throughout the state? Instead of tightening the implementation, they have relaxed it to suit vested interests. This is a step taken by the government through the back door for the entry of liquor in the state."
The prohibition exemption in the GIFT City is a positive experiment on part of the Gujarat government. If one draws comparison, a successful model exists in Saudi Arabia where there are exclusive compounds for expats with all facilities like in western countries inside the premises. Life outside the compound is different and regulated strictly. While the GIFT City might offer the opportunity to drink inside the premises, upon meeting the set guidelines, it will be difficult for the authorities to stop pilferages of liquor as well as cases of drunken driving endangering lives of people. One can only hope that this well-thought decision adds revenue to the state coffers but doesn't negatively impact the strong social fabric, road safety or safety of women.
(Bharti Mishra Nath is a senior journalist)
Disclaimer: These are the personal opinions of the author.