Mumbai: The Gujarat government Friday exempted Gujarat International Finance Tec-City (GIFT City) — a special economic zone — from the state’s alcohol prohibition law.
Under existing laws, visitors to Gujarat may buy alcohol from authorised outlets by obtaining a temporary permit.
However, with the relaxation, owners and employees of companies operating in GIFT City will be able to consume alcohol at hotels, restaurants and clubs, and authorised visitors of these companies will also be able to get a drink in these establishments with temporary permits in the presence of permanent employees of such companies. Temporary permits may be obtained on-the-spot at hotels and restaurants serving alcohol.
Gujarat has been a dry state since its creation in 1960, and the relaxation of the prohibition in GIFT City is expected to “boost business” in the special economic zone.
The relaxation comes days ahead of the 10th three-day Vibrant Gujarat Summit, set to begin in Ahmedabad on 9 January.
In a statement Friday, the Gujarat prohibition and excise department said, “GIFT City has emerged as a global financial and technological hub which is bustling with economic activities. An important decision has been taken on Friday to change the prohibition rules to allow ‘wine and dine’ facilities in the GIFT City area to provide a global business ecosystem to global investors, technical experts and national and international companies established there.”
The statement added: “Under the new policy, hotels, restaurants and clubs in the GIFT City area will be given permits for wine and dine facilities.”
The statement clarified, however, that while liquor can be served and consumed in these facilities, hotels and restaurants will not be able to sell liquor bottles for consumption off-premises.
“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. All employees and owners of GIFT City will be provided liquor access permits, using which they can consume liquor. Besides this, persons authorised by the companies or their visitors can consume liquor in the presence of regular employees using a temporary permit,” said the statement.
According to experts, the relaxation in liquor prohibition for GIFT City is a positive step.
“[Not having alcohol permits] was a deterrent anyway. So now with some relaxations and having the permits in place, I would say this is one step ahead,” said Ambareesh Baliga, an independent market analyst to ThePrint.
‘A big boost’
Located in Gandhinagar district, GIFT City was conceptualised in 2007 and is touted to be India’s first greenfield smart city and International Financial Services Centre (IFSC).
The special economic zone is home to more than 20,000 people working across the 400-plus companies operating here, including Oracle, Bank of America, Cyril Amarchand Mangaldas law firm, Citibank, State Bank of India, Bombay Stock Exchange, and the National Stock Exchange. There is also a commodity bourse and a bullion exchange.
The GIFT International Financial Services Centre (IFSC) offers a number of perks — total tax exemption for 10 years for office units in the IFSC area, no minimum alternate tax for companies opting for the new tax regime, Goods and Services Tax (GST) exemption on services received by units in the IFSC, and for investors, no GST on transactions carried out in IFSC exchanges, and a range of state subsidies.
“It [the prohibition relaxation] is a good boost as GIFT City is developed according to international standards as a SEZ area and local laws should not apply there,” Ramakant Jha, who served as the managing director and Group CEO GIFT City from 2010 to 2015, told ThePrint.
Jha added: “Right now it is not very different [the relaxation]. A permit is still required but it will be issued by the hotel employees on the spot. But still the form filling is there. In a SEZ area, ideally permits should not be required. But still it is one step ahead.”
According to Baliga, for any ecosystem to be developed, a tipping point is required and that is given when more and more people come in. “Once the tipping point is there, then others follow automatically.”
And this is where the real estate industry is hopeful.
Anish Thakkar, owner of Vagabond Real Estate based in Gandhinagar has been working around GIFT City area for a long time. He told ThePrint that earlier MNCs were hesitant to come to GIFT city because their employees were not keen on shifting.
“But now with the permissions in place, more companies will come in and existing infrastructure will be short. This will be a big boost and since yesterday evening when the news broke, developers in the area have increased 5-10% in their retail space rates, which will give a boost for commercial properties,” he said.
He added, however, that more clarity on the new procedure was needed for a boost in residential real estate.
(Edited by Poulomi Banerjee)
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