The Karnataka Lokayukta Police on January 17 arrested three officials of the Excise Department after allegations of corruption surfaced involving a bar licence application. The arrested officials include Deputy Commissioner Jagadish Nayak, Superintendent K.M Thammaiah and excise constable

Lakkappa Gani, who were caught red-handed while accepting `25 lakh from a man.

The action came after one Lakshminarayan filed a complaint against these officials who allegedly demanded `80 lakh to grant him a C7 bar licence. Based on the complaint, Lokayukta laid a trap wherein Nayak and Thammaiah were caught red-handed while accepting ` 25 lakh as part of the total amount. It is reported that the excise constable was in charge of taking the money from

Lakshminarayan and delivering it to the two officials.

Corruption in the Excise Department is nothing new and the amounts are huge. In 2024, a similar scandal broke out in Mandya wherein Excise Department officials allegedly demanded bribes up to `40 lakh for bar licenses and Minister N.Cheluvarayaswamy’s name was dragged into the scandal. A Congress party worker, Puneet, had filed a complaint with the Mandya Lokayukta, claiming that his repeated attempts to secure a CL 7 bar license were thwarted due to his refusal to pay bribes.

Puneet had alleged that his application was rejected four times for not complying with the officials’ demands for money, despite having submitted all documents. The complaint included audio and video evidence of the bribe demands made by Excise DC Ravishankar and Maddur Excise Inspector

Shivshankar. He also mentioned that the bribes went up to the Minister. According to Puneet, the initial bribe demanded was `40 lakh, later reduced to `20 lakh after a “50% discount”.

Systemic Corruption

Corruption in the excise department is systemic and deeply entrenched. For decades, the excise department across states has been regarded as one of the most lucrative postings in the bureaucracy. The reasons are obvious. Alcohol is among the most heavily regulated consumer products in India, touching multiple layers of licensing, approvals, renewals, inspections, quotas, and

enforcement. From distilleries and breweries to bottlers, distributors, wholesalers, retailers, bars, and restaurants, every link in the value chain is dependent on administrative discretion.

The Karnataka case fits a familiar pattern. Licences for bars, wine stores, microbreweries, or spirit manufacturing units are rarely straightforward administrative processes. They often involve ambiguous rules, discretionary interpretations, and time-bound approvals that are delayed indefinitely, leading to ‘unofficial payments’, sometimes openly discussed, sometimes referred to as

facilitation fees.

This reality is hardly confined to Karnataka. From Maharashtra to Tamil Nadu, Telangana to Uttar Pradesh, excise departments have periodically made headlines for corruption scandals. The sums involved are not trivial. Given that alcohol contributes between 15–25% of many state governments’ tax revenues, the financial stakes are enormous. Excise policy itself becomes a tool for extracting rents, through sudden rule changes, selective enforcement, opaque tendering processes, or arbitrary cancellations and renewals.