AP to divert liquor money for schemes, draws flak

Vijayawada: The Andhra Pradesh government has drawn flak as it expressed an intent to divert revenue from liquor to fund welfare schemes like the Amma Vodi, YSR Bharosa, Asara and Cheyuta.

The criticism was made by the Opposition during discussions for passage of a bill in the state legislative council on Wednesday.


Minister for finance and planning, Buggana Rajendranath, moved the Andhra Pradesh (Regulation of Trade in Indian Made Foreign Liquor and Foreign Liquor) (Amendment) Bill, 2021, on behalf of deputy CM and excise minister Narayana Swamy.

The minister dwelt at length on how liquor has become “an inevitable evil” as it was being smuggled into the state via the porous borders of Andhra Pradesh from six neighbouring states — Odisha, Maharashtra, Chhattisgarh, Telangana, Tamil Nadu and Karnataka.

He explained how the newly formed Special Enforcement Bureau booked a whopping 1.52 lakh cases in relation to smuggling of liquor and arrested nearly 2.11 lakh law violators.


The state government, he said, is intending to use the revenue generated from liquor sale for implementation of several welfare schemes to benefit those from the SC, ST, BC and minorities, by way of a social responsibility.

This kicked up a row in the council. MLC Balasubrahmanyam wondered how the state government could use the sale proceeds from liquor to fund Amma Vodi and other welfare schemes. “This would bring disrepute to the state and liquor consumers would claim their money was being used to fund education in the state.

He asked whether revenue from liquor had gone up or down after the state government started imposing a phased ban on liquor by cutting down the number of liquor outlets.


MLC Venkateswara Rao cautioned the government that this would send a wrong message to the society and asked what benefit the government gave to the poor consumers even as it enhanced the rate of liquor.

BJP MLC Madhav noted that the consumption of both branded liquor and illicitly distilled liquor went up in the state. The state government created an escrow account in the name of AP State Beverages Corporation Ltd to divert liquor funds and raise a loan of Rs 25,000 crore, instead of remitting money into the state’s Consolidated Fund.


In his reply,  minister Rajendranath explained in detail how liquor consumption has witnessed a steep fall in the state. The sale was 661 lakh cases of IMFL and beer per annum or 55 lakh cases per month in 2018-19; nearly 516 lakh cases per annum or 43 lakh cases per month in 2019-20; about 244 lakh cases per annum or 20 lakh cases per month in 2020-21 – during the Covid term.

From April to October, 2021, the sale was only 188 lakh cases per annum or 15 lakh cases per month, the minister said.

As for revenue, the minister said the state earned Rs 17,341 crore in 2018-19 and Rs 17,707 crore in 2019-20. In 2020-21, an amount of Rs 18,000 crore was earned, he said. Though the consumption of liquor has come down, the revenue has gone up majorly following the raising of rates of liquor, which was aimed at discouraging consumption.


The minister asserted, “As the state government is supposed to raise money either through taxes or loans or even by selling its assets, we are using revenue from liquor for welfare schemes and we don’t think this is wrong.”

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