This two-year licensing cycle, effective from 1 December 2025 to 30 November 2027, arrives at a crucial time for Telangana’s cash-strapped exchequer.
Published Oct 28, 2025 | 10:58 AM ⚊ Updated Oct 28, 2025 | 10:58 AM
A liquor shop. (iStock)
Synopsis: The Prohibition and Excise Department of Telangana on Monday, 27 October, wrapped up the allotment of 2,620 retail liquor outlets for the 2025–27 excise cycle. The government had received 95,137 entries for the 2,620 retail licenses, generating an upfront revenue of ₹2,860 crore.
In a heady ambience of electronic draws and euphoric cheers across the state, the Prohibition and Excise Department of Telangana on Monday, 27 October, wrapped up the allotment of 2,620 retail liquor outlets for the 2025–27 excise cycle — a process that has already poured nearly ₹2,860 crore into the state treasury from application fees alone.
The much-watched lottery, aimed at keeping the process transparent amid fierce competition from more than 95,000 hopefuls, took place without any incident. Each application, backed by a non-refundable ₹3 lakh fee, turned the draw into a high-stakes affair where luck and liquor met in equal measure.
This two-year licensing cycle, effective from 1 December 2025 to 30 November 2027, arrives at a crucial time for Telangana’s cash-strapped exchequer.
The countdown to Monday’s draw began in August when the government hiked the liquor license application fee from ₹2 lakh to ₹3 lakh — a steep 50 percent rise — in a bid to fuel its ambitious welfare and infrastructure spending.
The move triggered an avalanche of applications: By the 23 October deadline, a staggering 95,137 entries had been received for the 2,620 retail licenses, generating an upfront revenue of ₹2,860 crore.
According to Excise Department sources, the collections surpassed internal estimates, marking a ₹63 crore increase over the previous cycle despite 40,000 fewer applications this time.
In Hyderabad alone, competition was ferocious. For 82 outlets, 3,201 bids poured in — nearly 40 per shop. “The response exceeded even our most optimistic projections,” said a senior excise official. “The higher fees have turned this into a bonanza that adds much-needed liquidity to the state coffers.”
The lottery unfolded across all 33 districts through digital draws, with the process concluding smoothly. Jubilant winners in urban hotspots like Hyderabad and Warangal celebrated with impromptu gatherings, while entrepreneurs in smaller towns like Adilabad and Nizamabad breathed sighs of relief as their names flashed on the big screens.
One lucky allottee in Secunderabad summed up the moment: “Three lakh down, but two years of steady business ahead — it’s a gamble worth taking.”
While the license fees bring an instant windfall, they form only the first course in Telangana’s revenue feast. The bigger bite lies in the annual Retail Shop Excise Tax (RSET), excise duties, and VAT — the cornerstones of the state’s fiscal health, notwithstanding how much the liquor sold would affect the health of the people.
Under the new policy, shop owners will pay an annual RSET of up to ₹50 lakh in urban zones to lower slabs in rural areas. The department expects around ₹1,310 crore per year from this head — ₹2,620 crore across two years. Retailers opting for “walk-in” shops, with an extra ₹5 lakh fee, can also sell accessories like mixers and branded merchandise, likely nudging collections even higher. Together with the application proceeds, the state anticipates a ₹5,500-crore bounty from licensing by 2027.
The real goldmine, however, lies beyond licensing — in the excise duties and VAT on liquor sales. In FY24, these levies brought in a whopping ₹38,000 crore, driven by Telangana’s tightly controlled distribution model and high per capita consumption.
For FY26, Finance Minister Bhatti Vikramarka has set an audacious target: ₹50,000 crore in total excise revenue — a ₹12,000-crore jump from the previous year. The break-up is Excise Duties on Sales: ₹30,000 crore and VAT on Liquor: ₹20,000 crore.
Telangana’s dependence on liquor is an open secret. The sector contributes roughly 15 percent of total state revenues, guaranteeing funds for welfare schemes like farm loan waivers. As new licensees gear up to open their shops in December, the government faces a delicate balancing act: sustaining revenues without triggering social backlash for flooding the state with liquor.
(Edited by Muhammed Fazil.)
