Andhra Pradesh ministers have conducted a review of excise reforms and the state’s liquor policy, focusing on rationalizing the existing framework and addressing issues that arose under previous administrations. The discussions involved a comprehensive assessment of policies implemented between 2019 and 2024, with a view to formulating future strategies for the excise department.
During recent deliberations, ministers highlighted a significant policy shift aimed at prioritizing public safety over revenue generation, a departure from previous approaches. A key focus of these reforms has been the promotion of low-alcohol-content beverages to mitigate health risks associated with liquor consumption. This initiative is part of a broader effort to ensure that liquor consumption does not adversely affect the lives of citizens, particularly those from economically disadvantaged backgrounds.
New Excise Policy Framework
The state government has been actively revising its excise policies, with new regulations coming into effect from October 1, 2024. A significant aspect of this new policy is the privatization of liquor sales, moving away from government-operated outlets. Licenses for selling liquor are now being allocated to private individuals, companies, and entities through a transparent lottery system. The policy aims to standardize liquor pricing, ensuring availability of affordable options, with initiatives like selling 180 ml bottles of all brands at ₹99.
The new policy, designed to be in effect for two years from October 12, 2024, to September 30, 2026, has approved 3,736 private shop licenses across the state. A special allocation of 340 shops has been reserved for the ‘Geetha Kulalu’ community, traditionally involved in toddy tapping, to promote social equity and empowerment. Additionally, 12 premium store licenses are set to be issued for high-end liquor sales in major cities.
Reforms Addressing Pricing and Quality
In January 2026, a significant reform was enacted with the abolition of the Additional Retail Excise Tax (ARET) that had been imposed on bars since November 2019. This move aims to bring parity in liquor pricing between bars and retail shops, addressing a long-standing grievance of bar operators who faced competitive disadvantages due to higher prices. The removal of ARET is expected to improve margins for bar operators and create a more level playing field within the state’s liquor market.
The government has also emphasized ensuring the quality of liquor available to consumers. Allegations of substandard liquor and irregularities in procurement under the previous administration have prompted a overhaul of the system. The current government has directed officials to ensure that the acquisition of brands is driven by demand and to implement a demand-driven automated procurement system. Digital payment systems are also being introduced at all levels to enhance transparency and efficiency in transactions.
Social Inclusion and Public Health Measures
The revised excise policy incorporates measures for social inclusion, such as reserving a percentage of licenses for specific communities. Furthermore, the government is exploring the introduction of de-addiction centers and counseling services, funded in part by a new two percent cess on the landed cost of liquor. This cess is dedicated to supporting narcotics control and de-addiction initiatives, underscoring a commitment to addressing the public health implications of alcohol consumption.
The Andhra Pradesh Star Hotels Association (ASHA) has welcomed these reforms, particularly the granting of microbrewery permissions for classified hotels and the availability of premium liquor through a bottle indent system. The association noted that these changes would boost tourism, enhance the state’s MICE potential, and improve the competitiveness of the hospitality sector. Reforms also include rationalizing fees for bar licenses and implementing a lottery-based system for their allotment, ensuring transparency and broader community participation.
The Chenab Times News Desk