Daijiworld Media Network – Bengaluru

Bengaluru, Aug 18: The Karnataka government’s expectations of generating substantial revenue from liquor sales have taken a major hit, with its ambitious plan to raise Rs 1,000 crore by auctioning bar licences across the state receiving a lukewarm response from prospective buyers.

The excise department had planned to sell surplus and pending bar licences through an e-auction, hoping to generate around Rs 1,000 crore for the state exchequer. However, the auction fetched only around Rs 125 crore, according to estimates.

Numbers tell the story

The excise department conducted the e-auction of bar licences across Karnataka from July 24 to 31. A total of 569 bar licences were put up for auction, but only 120 were sold, leaving 449 licences unsold. Against the government’s expected revenue of Rs 1,000 crore, the auction generated only around Rs 125 crore.

The government put up for auction several categories of bar licences that had remained pending or unused for years. These included licences left unallotted under various quotas, licences suspended or seized for rule violations, licences that were not renewed within the stipulated period and were subsequently cancelled, and licences that had been sanctioned but never commenced and were later withdrawn or cancelled.

Why are buyers staying away?

According to excise department sources, the high deposit amount fixed by the government, restrictive conditions, stringent regulations and the prevailing competition in the liquor trade were among the major reasons for the poor response from prospective buyers.

Only a few licences in some of the state’s major commercial cities reportedly attracted bids. Licences in rural areas and smaller towns, however, failed to draw buyers.

As a result, the excise department’s plan to raise Rs 1,000 crore through the auction has fallen significantly short of its target, with the government receiving only around Rs 125 crore.

The fate of the 449 unsold licences remains uncertain, with the government expected to decide in the coming days what steps should be taken regarding the licences that failed to attract buyers.