The film takes place in the impoverished village of Laholi where, following droughts, most of the villagers' possessions are mortgaged to the local Thakurani Karamkali (Sudha Chandran). One of the few entertainments the villagers can afford is the lottery, Malaamal Weekly (malaamal is Hindi for 'rich').
Lilaram (Paresh Rawal) is the only educated man in the village. He has the job of intermediary between the lottery organisation and the village, for which he receives a commission whenever a villager wins; thus, he has a relatively good but volatile income. One day he reads the winning lottery numbers and realises that one of the tickets has won the top prize of one crore (about $220,000, a relative fortune in rural India). He devises a plan to obtain the winning ticket and present it to the commission as his own. He hosts a dinner (mortgaging his wife's beloved pet goat to the Thakur's wife to pay for it) and invites all the villagers who play the lottery, but the man he is looking for does not turn up. By elimination he deduces that the winner is Anthony (Innocent Vincent), the town drunk, and reasons that he didn't turn up because he knew that he had won the top prize. Hoping to at least extract his commission, he goes to Anthony's house, and finds him dead, the winning ticket clutched in his hand and a happy expression on his face.
Lilaram attempts to pry the ticket from Anthony's fingers but is thwarted by Anthony's body in rigor mortis. Lilaram eventually succeeds in freeing it with a knife; at this point Ballu (Om Puri), the local dairy farmer, enters the house and discovers him standing over Anthony's corpse with what appears to be the murder weapon in his hand. Ballu's unfortunate assistant Kanhaiya (Ritesh Deshmukh) has a hard time of following Ballu's orders and makes a lot of mistakes. Lilaram tells Ballu the truth and convinces him to remain silent in exchange for sharing the lottery winnings between them. Ballu and Lilaram are introduced to a solitary man named Joseph (Shakti Kapoor) as Kanhaiya also fails to hide Anthony's body but has a secret romance with Sukhmani. Some days later, Chokeylal (Asrani) Kanhaiya's father comes to the village and hears of Kanhaiya's insolence which prompts him to lock his own son in Ballu's barn. At night Lilaram, Ballu, Chokey and Joseph manage to catch a burglar who leads a gang of jealous farmers. The Burglar turns out to be Kanhaiya who was brainwashed after he was locked up. The men fail to kidnap Kanhaiya but accidentally kidnap Joseph by mistake.
Unfortunately for them, before dying Anthony managed to call the lottery commission and give his name and address, as well as his sister and several people to whom he owed money to tell them of his good fortune. The secret soon becomes impossible to keep, and Lilaram must figure out how to fool the lottery inspector (Arbaaz Khan), who is on his way to the village to interview Anthony.
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