Maharashtra Likely To End 50-Year Ban On New Liquor Licences To Increase Revenue: Report

In a significant policy shift, the Maharashtra government is set to lift a nearly 50-year-old ban on the issuance of new liquor shop licences as part of its strategy to boost state revenue. The move is aimed at strengthening the financial capacity of the Excise Department, which currently ranks as the fourth-largest contributor to the state's treasury, generating close to ₹43,000 crore annually.

According to a report by Loksatta, a government-appointed panel has recommended the issuance of 328 new liquor shop licences. This recommendation could mark the end of a freeze on new licences that has been in place since 1974 due to sustained public resistance.

Why the Ban May Be Lifted

The decision is being considered at a time when the state is under mounting pressure to finance several large-scale welfare initiatives, including the newly launched Mukhyamantri Majhi Ladki Bahin scheme. If fully rolled out, the new licensing policy could bring in an estimated ₹14,000 crore more each year through excise revenue.

However, the proposal has sparked political controversy, especially regarding the role of Deputy Chief Minister and Excise Minister Ajit Pawar, who also chairs the reform committee. Allegations have surfaced suggesting that some liquor businesses with links to Pawar-particularly those located in Baramati, his political base-may stand to benefit from the reforms. These concerns have led to questions about the neutrality of the committee's recommendations. Ajit Pawar has not responded to requests for comment on the matter.

If implemented, the policy would increase Maharashtra's number of retail liquor outlets by 19%. The current count stands at 1,713 shops, a figure that has remained static since the 1970s due to opposition from prominent socialist figures like N D Patil and Mrinal Gore.

New Licensing Model and Revenue Expectations

The proposed guidelines include a leasing model for the new licences. While acquiring an old licence in the open market can cost around ₹10 crore, the new licences would require a one-time, non-refundable deposit of ₹1 crore. The state expects to earn approximately ₹35 crore annually through licence fees under this new framework.

Industry experts argue that Maharashtra's liquor shop density remains significantly lower than that of neighbouring states, with only 1.5 shops per one lakh population compared to six elsewhere. Supporting the reform, Dr. Rajgopal Deora, Additional Chief Secretary of the Excise Department, told The Indian Express, "Given Maharashtra's size and demographics, the expansion is justified."