Karnataka to auction 579 inactive liquor licenses, eyes ₹500 crore boost

The state finance department has rolled out draft rules to auction unused CL-2 and CL-9 liquor licenses, aiming to raise ₹500 crore for welfare schemes and major projects.

In a major push to raise additional revenue, the Karnataka finance department has unveiled draft rules to auction 579 inactive liquor licenses across the state. The move is expected to generate around ₹500 crore, providing much-needed funds for welfare guarantee schemes and the Krishna Upper Stage-3 project.

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The licenses up for auction include CL-2 (retail liquor outlets), CL-9 (bar and restaurant licenses), and unused CL-11(C) licenses earlier allocated to MSIL-run outlets. For the first time since 1992, fresh opportunities in CL-2 and CL-9 categories are being opened, driving massive demand among prospective bidders.

Officials estimate that while licenses in Bengaluru could fetch bids of up to ₹3 crore each, given a past example where a CL-9 license sold for ₹3.8 crore, those outside the capital may command at least ₹1 crore per license. The government has also created two new categories, CL-2A and CL-9A, under the draft rules.

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As per Finance Advisor to the CM, Basavaraj Rayareddy, “The auction can help us raise ₹500 crore, as Bengaluru alone could see record-breaking bids.” Currently, license renewals fetch the state annual fees ranging between ₹4–7.5 lakh, but rampant resale in private deals has inflated market prices.

The rules also provide for the transfer of valid licenses to legal heirs in the event of the license holder’s death. Karnataka’s excise revenue has been steadily climbing, from ₹35,783 crore in FY 2024–25 to a target of ₹40,000 crore in FY 2025–26. Already, the state has collected ₹16,358 crore between April and August this year.

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