A tale of red tape

Dhiraj Arora, owner of No-Escape bar in Connaught Place, the capital's central business district, needs a liquor license for his new restaurant, Shalom, in Greater Kailash.

But Arora serves liquor only at private parties by getting a daily private party licence. He says the process is costly and that he is losing business by not being able to serve liquor to walk-in customers, especially during the peak October to March season.

Grouses he: "Restauranteers are losing a lot of business, especially with the onset of the festival season." On an average, liquor sales account for at least 50 per cent of the revenues of restaurants that serve liquor.

Restaurants in India's capital that wish to keep tipplers happy are required to obtain a liquor licence. But licences are now impossible to get "" in fact, none has been issued since July 1, 2003. So new restaurants are not serving liquor.

And thereby hangs a tale.

Licences used to be issued by the state-owned India Tourism Development Corporation (ITDC) till some months ago. But that responsibility has now been transferred to the Delhi government's excise department and, to some extent, the tourism department.

In the last three and a half months, the tourism department has just come up with the draft of a policy on issuing licences. The draft has now been sent to chief minister Sheila Dixit's office.

Delhi government insiders say that no decision on the draft is likely to be taken until the assembly elections are over. Right now, the tourism department does not even have the forms that restauranteers have to fill.

Only after obtaining the chief minister's approval will the tourism department start the process of prescribing a format for applications and appoint teams which would, in turn, survey restaurants and would give them the required clearance after which they can apply to the excise department for a liquor licence.

As a result, about 50 wannabe restauranteers are waiting for a liquor licence.

But all this, quite simply, is a classic tale of bureaucratese at its worst. The tourism department's clearance involves checking all the basic aspects of a restaurant "" the cleanliness, work processes, equipment, comfort and so on.

However, the excise department goes through exactly the same exercise before it gives a final license, irrespective of the tourism department's clearance (which, oddly enough, is required only in Delhi and Haryana).

"The tourism department's clearance has become completely reduntant and is just a bureaucratic hassle," a restaurant owner moans. Asks another restaurant owner: "Why have a clearance from the tourism department at all? Why can't the excise department decide on its own who should be given a liquor licence, which is the case all over India except in Delhi and Haryana?"

Good question. Not that ITDC was quick in clearing applications for liquor licences either. According to restaurant owners, when ITDC was in charge of issuing licences, it took at least a month to get clearance after the restaurant was completed versus the 15 days in which the excise department issued a liquor license.

The shelving of licence applications has involved a loss not just for the capital's hosteliery owners alone "" the state government too is losing excise duty. The state government expects to collect Rs 800 crore this year from total excise duty, up from Rs 725 crore last year.

An estimated 10 per cent of this (Rs 80 crore) comes from restaurants. And over 60 per cent of Delhi's 400 plus restaurants having come up in the last two years, the excise duty collected at restaurants will only shoot up.

The saving grace here, however, is that Delhi's excise department realises the problems restaurant owners are confronted with and recently started giving temporary licences to restaurants whose licences had expired, if all the other clearances were in order. What is more, the excise department is working on a fresh policy where tourism department clearance won't be required at all.

"We ourselves realise that it is an unnecessary hassle for a restaurant owner and we are working at making the process easier and shorter," a Delhi government official says.

Restaurant owners "" and perhaps even chief minister Dixit "" will, no doubt, raise a toast to that.