Tipplers to pay more in Telangana as govt hikes liquor prices to raise ₹3,600 cr revenue

An official said the Telangana government is cash-trapped due to sharp fall in GST refunds from the Centre.

The Telangana government has raised alcohol prices with an additional excise duty of 10 per cent to generate additional revenue of ₹3600 cr as it battles a precarious financial position, supposedly due to sharp fall in devolution of funds from the Centre, an official said.

The Telangana government has imposed an additional excise duty of 10 per cent on alcohol to raise additional revenue of ₹3600 crore. (HT Photo)

With effect from Tuesday, the cost of a beer went up by ₹20, the cost of hard liquor shot up by ₹10 for 60 ml to ₹80 for a 750 ml bottle. The cost of foreign liquor has gone up steeply by ₹150 for a full bottle.

Instructions to this effect had been issued on Monday to Telangana State Beverages Corporation Limited, which supplies liquor to all liquor depots from where wine shop owners buy their stock.

According to an excise department official who did not want to be named, the state government expects to generate an additional revenue of around ₹300 crore per month which adds up to ₹3,600 crore per year.

The government expects to rake in around ₹1000 cr in the three and a half months left in the current financial year, he said.

In addition to this, the state has generated huge income of more than ₹900 crore in the form of non-refundable deposit of ₹2 lakh each from 45,000 applicants seeking licenses for running 2,216 retail liquor shops across the state.

Apart from liquor outlets, the government also gets revenue from around 1400 bars in the state in the form of license fee of ₹40 lakh from each bar. This will fetch another ₹560 crore.

With the latest increase in liquor price by imposing additional excise duty, the state government is aiming at generating revenue of around ₹25,000 crore from liquor business.

The official said the state government had no other option but to bank on state excise revenue due to its precarious financial position.

Finance department officials told chief minister K Chandrasekhar Rao at a recent meeting that there was a possibility of fall in devolution of funds from the Centre up to 15 per cent. The state has already received 8.3 per cent less funds from the Centre till November.

An official release from the chief minister’s office said a 15 per cent drop in Central funds would mean a decrease of ₹2,957 crore. On December 7, Rao wrote to Union finance minister Nirmala Sitharaman requesting expeditious release of ₹4,531 crore of GST dues from the Centre. However, the Centre has released an amount of ₹1,026 crore from the Centre towards GST arrears, as per a communication received by the state form the Union finance ministry on Monday.