Andhra Pradesh's new liquor policy: Rs 99 liquor to counter illegal influx

The Andhra Pradesh government has rolled out a new liquor policy aimed at boosting revenue by Rs 30,000 crore, curbing illegal trade, and funding welfare schemes

In a shift from the previous state-controlled liquor system, the Chandrababu Naidu administration in Andhra Pradesh is now seeking to stabilise income and curb illegal alcohol trade that plagued the old model. The state government implemented a new liquor policy on October 15 to close the revenue gap with Telangana and fund welfare schemes promised by Naidu.

Officials anticipate the new policy will generate approximately Rs 30,000 crore annually, with an estimated Rs 20,000 crore expected for the remainder of the current financial year.

Rs 99 quarter bottle of liquor

To tackle the problem of illegal liquor influx — evident from the seizure of 17.8 million litres in recent years — the government plans to provide affordable legal alternatives, including a Rs 99 quarter bottle of liquor. The initiative also proposes the establishment of liquor malls, inspired by successful models in Haryana, to improve consumer access to premium brands and promote legal purchases.

The government is also encouraging major liquor brands to return to the market to revitalise legal trade and dismantle illegal supply chains. The allocation of 3,396 liquor shop licences via a lottery system attracted 89,882 applications, generating Rs 1,797 crore in non-refundable fees. However, allegations of political interference surfaced, suggesting that some applicants were pressured to surrender their licenses in exchange for kickbacks, with reports of syndicates demanding commissions as high as 30 per cent.

In response to these, the government has mandated GPS tracking for liquor deliveries and CCTV monitoring at retail outlets to enhance transparency and deter malpractice. Opposition to the policy has been fierce, with YSR Congress Party leader Jagan Mohan Reddy denouncing it as a ‘mafia era’ that primarily benefits private distilleries. He cautioned that the introduction of Rs 99 liquor could lead to the circulation of low-quality products, posing significant health risks.

Aim to recover financial losses

This increase in revenue is crucial for financing Naidu’s welfare initiatives and recovering financial losses incurred from past alcohol sale regulations. Since the bifurcation of Andhra Pradesh in 2014, the state has struggled to keep pace with Telangana’s liquor revenues, with the deficit ballooning from Rs 4,186 crore between 2014 and 2019 to Rs 42,762 crore by 2024.

According to a report by Moneycontrol, officials have criticised the prior administration led by YS Jagan Mohan Reddy for ineffective measures aimed at reducing alcohol consumption through strict state controls. These attempts resulted not only in lost revenue but also in a rise in the illicit liquor trade. An excise official noted that had the policies from 2014 to 2019 remained in place, they could have generated an additional Rs 18,860 crore.

[With agency inputs]