In a significant decision aimed at enhancing the financial health of the state and correcting long-standing anomalies in liquor pricing, the Andhra Pradesh Cabinet, under the leadership of Chief Minister N. Chandrababu Naidu, on Thursday approved a series of measures affecting liquor pricing, taxation, and broader economic policy. The cabinet’s decisions include a modest increase in the maximum retail prices of certain categories of alcoholic beverages, the withdrawal of additional excise taxes on bars, changes in retailer margins, new permissions for microbreweries, and the establishment of key institutional frameworks to strengthen logistics infrastructure and investment climate in the state.

The decisions were detailed by K. Parthasarathy, the State Information and Public Relations Minister, at a press briefing held following the cabinet meeting. According to Parthasarathy, these measures are intended to correct pricing disparities that have existed between different points of sale, bolster state revenue without imposing undue burden on consumers, and promote investment and economic activity in tourism, hospitality, and logistics sectors.

At the heart of the cabinet’s liquor policy revision is the decision to raise the maximum retail price (MRP) of all sizes of India-Made Foreign Liquor (IMFL) and foreign liquor by a uniform ₹10 per bottle. Notably, this increase will not apply across the board. The cabinet explicitly excluded certain categories from the price hike, including the more affordable 180 ml IMFL bottles that are priced around ₹99, as well as beer, wine, and ready-to-drink (RTD) beverages. By limiting the price increase to specific categories of liquor, the government aims to ensure that lower-cost options remain affordable, while still addressing fiscal requirements.

In addition to the ₹10 increment in MRP for applicable liquor categories, the cabinet has approved a revision in retailer margins. Retailers will now receive approximately 1% of the MRP on IMFL and foreign liquor, and the increase in margin will also apply to 180 ml IMFL bottles, beer, wine, and RTDs. Parthasarathy emphasized that this increase in retailer margins was designed to support retail businesses, acknowledging the role of retailers in the distribution network and ensuring that they benefit from the revised pricing structure.

A key motivation behind revisiting the state’s liquor pricing policy was the recognition of pricing disparities that had emerged between bars and retail shops. Previously, bars were subject to an additional retail excise tax, which resulted in higher billing prices for the same products when compared to retail outlets. This discrepancy created confusion among consumers and arguably placed bars at a competitive disadvantage.

To address this anomaly, the cabinet resolved to withdraw the additional retail excise tax previously levied on bars. The removal of this tax is expected to bring about price parity between bars and retail shops, simplifying the pricing structure and making it fairer for all stakeholders. Parthasarathy noted that the withdrawal of the additional tax would reduce the financial burden on bars by approximately ₹340 crore annually, relieving a significant cost pressure on hospitality businesses that have struggled with the effects of the tax disparity.

From the government’s perspective, the combined effect of the ₹10 price hike on certain liquor products and the increase in retailer margins is projected to yield approximately ₹1,391 crore in additional revenue annually. This boost in revenue is significant for the state’s fiscal planning, especially as it seeks to balance development priorities with sustainable revenue generation. The careful calibration of price increases, exclusion of essential categories, and removal of punitive taxation for bars reflects a nuanced approach to fiscal policy, one that seeks to balance economic growth with fairness and competitiveness.

Beyond the domain of liquor pricing, the Andhra Pradesh cabinet also addressed broader policy areas, including tourism, hospitality, and infrastructure. Among these measures is the approval of a proposal to permit the establishment of microbreweries in designated areas outside traditional municipal corporation limits. Previously, permissions for microbreweries were generally confined to within the limits of municipal corporations. Under the new policy, microbreweries will be allowed in areas within five kilometers of municipal corporation boundaries, in recognized tourist centers, and in three-star and above hotels irrespective of their location.

The expansion of geographic scope for microbreweries is a deliberate effort to stimulate investment in the hospitality sector and enhance the tourism appeal of regions beyond major urban centers. Microbreweries have emerged as popular attractions that combine local culture with culinary experiences, and by broadening the areas eligible for such establishments, the state hopes to attract more investors and create jobs in hospitality, tourism, and allied sectors. This policy is expected to contribute to a vibrant tourism ecosystem in Andhra Pradesh, encouraging visitors to explore lesser-known destinations while enjoying enhanced leisure options.

In what is described as a major move to strengthen logistics infrastructure and attract institutional investment, the cabinet gave its approval for the establishment of the Andhra Pradesh Logistics Infrastructure Corporation (APLINC). This entity is envisioned as an integrated logistics infrastructure holding company that will play a central role in coordinating and scaling logistics development across the state. The creation of APLINC reflects the government’s recognition of logistics as a cornerstone of economic growth and competitiveness.

Complementing the formation of APLINC, the cabinet also cleared the establishment of the Andhra Pradesh Logistics Fund, structured as an Alternative Investment Fund (AIF). The logistics fund aims to mobilize institutional capital for infrastructure projects, particularly those that enhance connectivity, streamline supply chains, and foster industrial development. Under the proposal, the state government will serve as the anchor sponsor of the fund, committing between 10% and 20% of the total corpus. The remaining capital is expected to be raised from institutional investors who are increasingly looking for infrastructure investment opportunities with stable long-term returns.

To ensure effective governance and professional management of the logistics fund, the government plans to appoint a professional Asset Management Company (AMC) and a Trustee. This structure is intended to align with best practices in fund management, offering transparency, accountability, and efficient deployment of capital into high-impact logistics projects. By adopting a professionalized model, the state seeks to attract greater investor confidence, unlock value in underdeveloped logistics assets, and accelerate the implementation of critical infrastructure initiatives.

Taken together, the decisions made by the Andhra Pradesh cabinet reflect a multi-pronged strategy aimed at strengthening the state’s financial position, supporting key sectors such as hospitality and tourism, and building robust infrastructure for future growth. The calibrated increase in liquor prices, coupled with the removal of burdensome taxation on bars, underscores a commitment to fiscal prudence without stifling economic activity. Meanwhile, the expanded permissions for microbreweries and the institutionalization of logistics infrastructure development signal a forward-looking approach to economic diversification and investment attraction.

State officials and industry stakeholders will be closely watching the implementation of these policies in the coming months, with particular attention to consumer response to the revised liquor pricing, the uptake of microbrewery licenses in expanded areas, and the initial formation and fundraising efforts of the logistics fund. If successfully executed, these measures could set a precedent for balanced fiscal reform and strategic economic planning in the region, reinforcing Andhra Pradesh’s position as a dynamic and investment-friendly state in India.