UP's Border Districts with Dry Bihar Lead State's Excise Revenue Collection in 2025-26
In a significant development for Uttar Pradesh's fiscal landscape, six districts sharing borders with the 'dry' state of Bihar have emerged as the top performers in excise revenue collection during the 2025-26 financial year. This trend highlights the economic impact of Bihar's prohibition policy on neighboring regions.
Exceptional Revenue Performance
The excise department's recent review reveals that five out of these six border districts have collected more than 90% of their annual revenue targets. Remarkably, two districts—Ballia and Sonbhadra—have surpassed expectations by recording collections exceeding 100% of their targets. Only two other districts across Uttar Pradesh have achieved this milestone during the same period.
This outstanding performance contrasts with the state's overall collection rate of 88% of the target, demonstrating how border districts are outperforming interior regions in revenue generation from alcohol sales.
Cross-Border Demand Dynamics
The excise department's analysis of demand and supply patterns across all 75 districts indicates a clear trend: residents of Bihar are crossing state lines to purchase alcohol from retail shops operating along the border. Alternatively, they are buying in bulk quantities to smuggle back into their home villages and towns to meet local demand for spirits.
This phenomenon has been observed consistently in all six border districts—Ghazipur, Chandauli, Kushinagar, Deoria, Ballia, and Sonbhadra—since Bihar implemented prohibition in April 2017. However, the 2025-26 fiscal year brought unexpected surprises even for industry observers.
Surprising Consumption Patterns
Kushinagar and Deoria, two economically backward districts in eastern Uttar Pradesh, have demonstrated higher spirit consumption than their more affluent counterparts in western UP districts such as Meerut, Aligarh, Bareilly, Mathura, and Moradabad. This finding contradicts conventional economic indicators, as the per capita net domestic product (average individual income) in Kushinagar, Deoria, and Ballia is approximately half that of individuals in Meerut, Aligarh, and Bareilly.
Sunil Singh, a retailer operating a liquor shop in Tamkuhi Raj, Kushinagar—located merely 300 meters from the Bihar border—shared insights into this unusual consumption pattern. "I obtained my license in April last year and established my shop along Samaur Road. The majority of customers visiting our outlet purchase liquor bottles in bulk quantities. We do not require identification from customers when selling bottles and serve everyone regardless of whether they hail from Uttar Pradesh, Bihar, or any other state," Singh explained.
Logistical Challenges and Regulatory Flexibility
Preventing cross-border smuggling presents considerable challenges due to frequent movement of trains, buses, commercial vehicles, and private vehicles between Uttar Pradesh and Bihar. Additionally, the presence of three major rivers—Gandak, Ghaghra, and Ganga—along with their tributaries enhances accessibility between border towns in Kushinagar, Deoria, Ballia and their counterparts in Bihar's West Champaran, Gopalganj, Siwan, and Buxar districts.
Current regulations further facilitate this cross-border trade through flexible 'limit of sale by retail' rules. Legally, an individual can carry up to 1 liter of country liquor, 4.5 liters of both domestic and foreign liquor, and 6 liters of beer from retail shops in Uttar Pradesh.
Historical Context and Political Factors
While excise department officials declined to comment on the matter, Professor Vinod Singh, head of the economics department at Lucknow University, offered valuable perspective. "We are all aware that elections occurred in Bihar last year. Naturally, demand for liquor would have increased substantially in bordering areas during this period," he noted.
Professor Singh recalled similar patterns emerging in the late 1990s in districts like Muzaffarnagar, Noida, and Saharanpur when former Haryana Chief Minister Bansi Lal imposed prohibition between 1996 and 1998. "One person's loss becomes another's gain, and currently Uttar Pradesh is reaping the benefits once again," he concluded, highlighting how prohibition policies in neighboring states historically create economic opportunities for border regions.
The sustained revenue performance of these six border districts underscores how regional policy differences can create unexpected economic advantages, with Uttar Pradesh's excise department benefiting from Bihar's continued prohibition while facing ongoing challenges in monitoring cross-border alcohol movement.
