The Karnataka Urban Development Department in a July 29 notification has extended the timings for bars, restaurants, clubs etc to 1 am from the earlier 11 am order, in the government’s bid to shore up revenues. The deadline extension notification by the Department is applicable to various categories of liquor licence-holders within the Bengaluru city corporation limits, including clubs, star hotels, boarding and lodging establishments. The new timings are not applicable to other parts of the State.

“So far, only bars and restaurants within the limits of the Commissionerate had permission to be open till 1 am. Now, all commercial establishments across the Bruhat Bengaluru Mahanagara Palike (BBMP), the city’s civic body will remain open till 1 am,” the notification said.

Operational Hours for Licensed Establishments

As per the order, establishments with CL-4 (clubs), CL-6 (A) (star hotels), CL-7 (hotels and boarding houses), and CL-7D (hotels and boarding houses owned by individuals from the Scheduled Castes and Scheduled Tribes) licenses can now operate from 9 am to 1 am. Those holding CL-9 (refreshment room (bar)) licenses can operate from 10 am to 1 am.

Hotels Association Welcomes Move

The President of the Bruhat Bangalore Hotels Association, P.C Rao, said, “This will help the public and aid in job creation. Henceforth, bars, restaurants, shops, and other establishments in Bengaluru will remain open till 1 am.” The extension of timings is expected to benefit the hospitality industry which has been lobbying for extended timelines, in sync with the city’s vibrant nightlife. The city which is bursting at its seams has a population of over 1.50 crore with about 50 lakh migrants and the central business district, a 10-km radius, is always buzzing with activity.

Liquor shops in rural areas

The Minister for Excise, R.B.Timmapur had mooted the proposal to grant licences to establish 400 liquor shops in rural areas across the state, but the Chief Minister had to drop the proposal, coming under fire for promoting liquor. The Opposition had termed the scheme as ‘Liquor Bhagya’ and demanded its withdrawal.

Bid to Shore up Excise Revenue

The Congress-I government in Karnataka, led by the Chief Minister Siddaramaiah, has been constantly thinking of increasing revenues as it has to fulfil the five election promises it had made –   Gruha Lakshmi (providing financial assistance to women heads of households), Gruha Jyothi (free electricity up to 200 units), Yuva Nidhi (unemployment allowance for graduates), Shakthi (free bus travel for women) and Anna Bhagya (10 kg rice free). The Congress (I) won the elections based on these promises and they used the same strategy in the Telangana polls where it won and in the Lok Sabha elections.

While presenting the Karnataka Budget for 2023-24, the Chief Minister had announced hike in additional excise duty on Indian Made Foreign Liquor (IMFL) and beer. While the government increased existing rates of additional excise duty on IMFL by 20 per cent on all 18 slabs, it also increased additional excise duty on beer from 175 per cent to 185 per cent. “Even after the increase in excise rates, the price of liquor in our state would be lower when compared to the neighbouring states,” the Chief Minister had said in the budget speech

For the 2024-25 financial year, the State has set an ambitious excise revenue target of Rs 38,525 crore. Up to January 2024, the State had collected Rs. 28,181 crores in excise revenue. “The revenue collection target for 2024-25 has been fixed at Rs. 38,525 crore,” the Chief Minister had announced.

Karnataka is considered among India’s top beer markets. As per reports, Karnataka consumes around 3.8 hectolitres of beer annually, roughly 11% of the national volume.  The share of beer in excise revenue has gone up from Rs 2,438 crore in 2020-21 to Rs 4,460 crore in 2022- 23. The liquor industry is the first recourse the government takes to increase its revenues.

Karnataka hires Boston Consulting Group

In its bid to mobilise Rs. 50,000 crore to Rs. 60,000 crore annually to implement the five guarantees, besides funding development projects, the Karnataka Government has engaged the services of Boston Consulting Group to suggest ways and means to boost the state revenues. The Boston Consulting Group has been hired at a cost of Rs. 9.5 crores for a period of six months.

R.Chandrakanth