The Chief Minister said stringent action should be taken against those running such shops, and directed officials to cancel the license of dealers running the illegal outlets.

Jagan Reddy, who took oath as the Chief Minister on Thursday, held a meeting with senior officials here to review the state's finances.

He said his government was committed to fulfill its poll promise of imposing total prohibition in phases.

Jagan, as YSR Congress Party chief is popularly known, said "belt shops" should be removed to protect the interests of poor and happiness should prevail in every family by removing this menace.

"If necessary, the government should consider running liquor shops on its own," an official statement quoted him as saying. He asked the officials to study the best practices being observed in other states.

Jagan said awareness and rehabilitation programmes should be conducted to distance the poor from liquor.

He also asked the officials to prepare reports on financial status of the state to place before 15th Finance Commission stressing the need for according special category status to Andhra Pradesh.

He said officials should explain the present financial situation and why the state needs special category status to overcome the financial crisis.

Jagan also wanted the officials to come out with innovative ideas to improve the financial condition without burdening the common man. He suggested a green tax on industrial waste, value addition to red sanders, getting loans with low interest rate and a sand policy.

He expressed surprise that under the previous government, funds yielded through loans by various corporations with counter-guarantee from the state government were diverted.

The Chief Minister said financial discipline should be maintained by everyone. He said the excise and prohibition income should not be considered as a mere revenue source.