BENGALURU: Buoyed by the revenue collection by the Excise Department, CM Siddaramaiah is likely to increase its revenue target to around Rs 45,000 crore for FY 2026-2027 in the budget from Rs 40,000 crore in the previous fiscal, highly placed sources said.
The department is gearing up to overachieve the last fiscal target of Rs 40,000 crore to a little over Rs 41,000 crore by the month-end. As on March 2, the department had collected Rs 36,500 crore, and the department is hopeful of mopping up Rs 4,000 to Rs 5,000 crore by March 31, sources said.
Achieving heightened revenue targets does not necessarily suggest increased alcohol consumption. On the contrary, alcohol consumption is said to have slowed down in the last couple of years in Karnataka.
Last year, the CM had raised the Additional Excise Duty (AED) on the first four slabs (with the lowest MRP) of Indian Made Liquor (IML) by Rs 15. It is these first four slabs that contribute 80-85% towards the total excise revenue in Karnataka. The increase in AED on IML and beer may have impacted alcohol consumption but it bulked up the state revenue.
Alcohol for human consumption is not covered under the Goods and Services Tax, allowing states to retain the power to levy their own excise duty and Value Added Tax (VAT) on it, thereby helping them to maintain revenue and fiscal autonomy. This perhaps helps explain why subsequent governments in the state have been taxing alcohol, including beer, and justifying the steep annual increase in the excise revenue targets. In 2016, the revenue target for excise was Rs 16,500 crore. If the revision for 2026-27 is pegged at Rs 45,000 crore, it would be an increase by 150% since 2016.