Hyderabad: The Excise Department of Telangana has reaped substantial profits, amounting to crores of rupees, without selling a single drop of liquor. Reports reveal that the department has garnered an impressive revenue of Rs 2639 crore by processing applications for setting up liquor shops.
Remarkably, the revenue was generated through the application process itself, without any actual sale of alcoholic beverages. A total of 132 applications were received by the Excise Department, each seeking permission to establish one of the 2,640 proposed liquor shops. Each applicant was charged a non-refundable fee of Rs 2 lakh, regardless of whether their request for a licence was granted or denied. This strategic move has led to a staggering profit of Rs 2,639 crore for the department.
The application fee is determined based on the population of the locality where the liquor store intends to operate. For instance, establishments situated in areas with populations ranging from 50,000 to 1 crore are required to pay an excise fee ranging from 50 lakhs to 1 crore rupees. Additionally, by August 23, one-sixth of the annual license fee must be paid by the applicants, marking their commitment to setting up the liquor shops.
The financial dynamics of this arrangement favour both the government and potential traders. While the upfront costs may seem significant, the projected profit share balances the equation. Liquor shop owners can expect a 27 percent profit from regular brand sales and a 20 percent profit from premium brand sales, making it an enticing prospect.
The application window for aspiring liquor shop owners opened on August 4 and closed last Friday. Licenced establishments are expected to commence operations on December 1, marking the beginning of a new phase in Telangana’s alcohol retail landscape.
This impressive revenue generation strategy is not unprecedented for Telangana’s Excise Department. Two years prior, the department earned a substantial Rs 1,370 crore from 69,000 applications, which were solely application fees. On top of this, an additional Rs 3,500 crore was garnered through liquor shop licencing.
In conjunction with this novel approach to revenue generation, Telangana has also witnessed a substantial increase in revenue from liquor sales. The figures speak for themselves, with alcohol sales increasing from Rs 12,703 crore in 2015–2016 to an impressive Rs 25,585 crore in 2021–22. In the past year alone, the state has witnessed alcohol sales totaling around Rs 30,000 crore.
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