Bengaluru: The Karnataka government has unveiled a draft excise policy that proposes a major shift in how alcohol is priced and regulated in the state. The new approach aims to link liquor prices to the “social cost” of alcohol consumption, including its impact on public health and society.
According to the draft, alcohol currently brings in around ₹34,600 crore annually for the state. However, the government estimates that the broader social costs—such as road accidents, domestic violence, liver disease, alcohol dependency, and loss of household income—add up to nearly ₹51,000 crore.
The Chief Minister’s Office said the policy is designed to create a more citizen-focused system, where pricing reflects the real cost of alcohol on society rather than just revenue considerations.
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Key Proposals
One of the major changes suggested is a shift to strength-based taxation, where excise duty will depend on the alcohol content of beverages, along with VAT. This would replace the current ad valorem (price-based) taxation system.
The draft also proposes:
- QR code-based tracking of the supply chain to reduce illegal trade
- Simplified and fully digital licensing processes
- Standardised health warnings on liquor bottles
The government aims to reduce overall alcohol consumption by 8–9% over the next six years and encourage people to shift towards lower-strength drinks. Officials believe the new taxation model will simplify the system while improving compliance and monitoring.
Public Feedback Invited
As part of a participatory approach, the government has invited feedback from citizens, industry stakeholders, and experts. A dedicated online consultation portal and a WhatsApp chatbot have been launched to collect suggestions before the policy is finalised.
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