Quick Explainer: Maharashtra Lifts Liquor Ban Near Dam Backwaters; What Does it Mean?

Recently, the Maharashtra government allowed the serving and consumption of alcohol on premises near dam backwaters by amending a five-year-old policy, aiming to curb illegal liquor sales and promote tourism in these areas, as reported by PTI, quoting officials.

The state Water Resources Department issued a Government Resolution (GR) last month, on October 8, according to the same report. Prior to this, on June 17, 2019, the department had permitted the development of land and premises near reservoirs under the public-private partnership (PPP) or build-operate-transfer (BOT) models.

However, at that time, the sale and consumption of liquor were not allowed, and the same GR stated that any violation would result in termination of the contract. Speaking to Local Samosa, activist B. N. Kumar, convenor of the Human Chain Online forum, mentioned that the earlier restriction was impractical. “In a state where liquor is widely sold and consumed legally, imposing selective bans in a few areas made little sense as it only encouraged illegal trade,” he said.

Currently, Maharashtra has 3,255 irrigation projects — including 138 major, 255 medium, and 2,862 minor ones. Most of these are located in hilly and scenic regions, with several rest houses, inspection bungalows, and staff quarters nearby, according to PTI’s report.

Officials from the department were quoted as saying that due to a lack of manpower and maintenance, many of these properties remain unused. Hence, the new GR removes the restriction and allows alcohol to be served within such premises. While the lease period was earlier limited to 10 or 30 years, it has now been extended to up to 49 years.

The move, as stated, aims to curb illegal liquor sales through unauthorised stalls and shanties around dam areas that had emerged following the liquor ban.

Why does it seem beneficial?

Kumar cited the experiences of other states — including Maharashtra, Gujarat, Bihar, and Andhra Pradesh — where liquor restrictions have largely backfired. “Bans have only led to smuggling, bootlegging, and illegal sales, defeating the very purpose of prohibition,” he said.

He further explained that the ban had created a parallel economy around the production and sale of alcohol, fuelling illegal trade instead of stopping it. The new decision, he noted, also brings hospitality activities under proper regulation.

“Now that the government has taken a policy decision to allow liquor sales near dam sites, it is important to promote responsible drinking and strictly regulate shop timings,” Kumar added.

Since these operations will now come under the department’s purview, compliance with the law can be better ensured. The move is also expected to generate local employment, with the resulting revenue flowing into the state exchequer, according to government officials.

Maharashtra's liquor revenue has been estimated to increase by approximately Rs. 14,000 crore to Rs. 57,000 crore in the 2025-26 financial year, owing to a recent excise duty hike in June, this year, on Indian-Made Foreign Liquor (IMFL) and country liquor.

The state had also introduced a new category, Maharashtra Made Liquor (MML), to expand the revenue base and offer a new source of income. 

However, Abhay, a citizen activist, criticised the move, calling it “an outright careless decision to prioritise revenue for the state.”

The flip side

Even though it looks promising, allowing the sale and consumption of alcohol in these premises can be seen as risky. With the potential increase in hooliganism, it might prove to be a risky affair.

Talking of the flip side, the citizen activist cautions: "It is an irresponsible tone in every way that would encourage untoward and unruly behaviour of the alcohol consumers over public safety and dignity."

To mitigate any potential problems, the activist Kumar, hence, states, "The enforcement must be uncompromising. The police must conduct rigorous checks against drunken driving and spare no one, whoever it might be. Any leniency or political pressure to protect offenders will only create law and order problems,” he cautioned.