The Karnataka government has launched a pioneering initiative to auction 569 unused and unallotted retail liquor licenses through a transparent electronic bidding process, marking the first such effort since the establishment of the State Excise Department in 1965. This strategic move aims to mobilize substantial additional resources for the state exchequer amid fiscal pressures. The e-auction is projected to generate significant revenue, with estimates suggesting close to Rs 1,000 crore in extra funds.

Proposed by Chief Minister Siddaramaiah in the 2025-26 budget presented on March 7, the transparent e-auction system follows necessary amendments to excise rules. The department has notified the allotment of these licenses, comprising 477 CL-2A retail liquor shop licenses and 92 CL-9A bar and restaurant licenses. Bengaluru urban district leads with the highest allocation, featuring 182 licenses distributed across eight excise districts in the city.

Bidding registration commenced on December 22, 2025, with live e-bidding scheduled from January 13 to January 20, 2026, via the MSTC Limited platform. Prospective bidders are required to pay a one-time registration fee of Rs 1,000 plus GST and a non-refundable application fee of Rs 50,000 per license. Payments must be finalized at least 48 hours prior to the selected auction slot to ensure participation.

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Previously unused CL-2 and CL-11C licenses, including those allotted to the government-owned MSIL but never operationalized, have been reclassified as CL-2A for this auction. Discontinued CL-9 licenses are similarly reclassified as CL-9A. To promote inclusivity, the process includes reservations: six percent for Scheduled Caste-A, six percent for Scheduled Caste-B, five percent for Scheduled Caste-C, and seven percent for Scheduled Tribes in both CL-2A and CL-9A categories.

This auction represents a key measure to enhance revenue collection and streamline liquor license allocation, ensuring greater transparency and equity. As the process unfolds, it is expected to provide a vital boost to the state's financial resources while addressing long-pending unused permits. The successful implementation could set a precedent for future excise reforms in Karnataka.

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