Punjab’s Excise Policy 2025-26: Targeting Rs. 11,020 Crore Revenue and Industry Reforms
Punjab Cabinet Approves Excise Policy for 2025-26 with a Revenue Target of Rs. 11,020 Crore
Chandigarh, February 27, 2025 – In a major move aimed at strengthening the state’s revenue generation, the Punjab Cabinet, under the leadership of Chief Minister Bhagwant Mann, has approved the Excise Policy for the 2025-26 financial year. The new policy sets an ambitious revenue target of Rs. 11,020 crore, marking an increase of 8.61% compared to the previous year’s target of Rs. 10,145 crore. The policy introduces several strategic reforms designed to enhance revenue collection and streamline the state’s liquor industry.
Revenue Growth and Policy Reforms
The new excise policy reflects a significant growth in revenue under the current regime. During the 2024-25 financial year, the state government exceeded its excise revenue target by collecting Rs. 10,200 crore, surpassing the original target of Rs. 10,145 crore. This marks the first time in Punjab’s history that excise revenue crossed the Rs. 10,000 crore mark.
Under the previous government, excise revenue collections were far lower. In the final year of the SAD-BJP alliance, the revenue stood at a mere Rs. 4,405 crore, and in the last year of Congress rule, it increased slightly to Rs. 6,254 crore. The current policy is designed to build on this momentum, with the state targeting an additional Rs. 874.05 crore in revenue for the upcoming fiscal year.
Key Features of the New Excise Policy
The new Excise Policy for 2025-26 includes several noteworthy changes aimed at balancing retail trade, boosting consumer experience, and increasing revenue. One of the most significant changes is the introduction of an e-tendering process for the allotment of L-2/L-14A vends. This online bidding process aims to enhance transparency and ensure more widespread participation in the retail liquor trade.
To increase the availability of country liquor, the policy raises the quota of Punjab Medium Liquor to 8.534 crore proof liters, which represents a 3% increase over the previous year. However, there will be no increase in the rates for country liquor during this period.
Support for Defence Forces and Tourism Initiatives
In a move to provide relief to the state’s defense personnel, the policy has reduced the wholesale license fee for defense forces by 50%, from Rs. 5 lakh to Rs. 2.5 lakh. This decision is expected to ease the burden on defense establishments while ensuring that they continue to operate within legal frameworks.
The policy also aims to bolster tourism in Punjab by increasing the possession limit of liquor for farm stays. The limit for Indian Made Foreign Liquor (IMFL) has been increased from 12 quarts to 36 quarts, allowing greater flexibility for tourism operators. Additionally, the policy raises the permissible quantity of beer, wine, gin, vodka, and other liquor products available for tourism-related businesses.
Support for New Investments and Enforcement Improvements
To foster new investments in the state’s liquor industry, the policy includes provisions for setting up new bottling plants in Punjab. Furthermore, the fee for standalone beer shops has been significantly reduced from Rs. 2 lakh to Rs. 25,000 per shop, making it more accessible for entrepreneurs to enter the market.
The policy also introduces a proposal to establish Excise Police Stations in the coming fiscal year to strengthen enforcement and ensure compliance with liquor regulations. This move is expected to enhance the ease of doing business in the state and ensure greater control over illegal activities in the liquor trade.
Additionally, the policy aims to mobilize funds for welfare initiatives by increasing the Cow Welfare Fee by 50%, from Rs. 1 per proof liter to Rs. 1.5 per proof liter. This increase is projected to raise the Cow Welfare Fee collection from Rs. 16 crore to Rs. 24 crore annually.
Digitizing and Streamlining the Liquor Industry
One of the key features of the new policy is the introduction of automatic approval for liquor brands where there is no increase in Excise Duty Payment (EDP). This will be facilitated through the e-Abkari portal, which is aimed at improving efficiency and reducing paperwork for liquor manufacturers.
Punjab Tirth Yatra Samiti and Other Cabinet Approvals
In addition to the excise policy, the Punjab Cabinet has also approved several other key initiatives, including the formation of the Punjab Tirth Yatra Samiti, which will help facilitate easy and efficient pilgrimage travel for residents under the Mukh Mantri Tirth Yatra Scheme. This initiative aims to provide affordable travel options for Punjab’s residents to visit religious sites.
Furthermore, the Cabinet has designated the Punjab Information & Communication Technology Corporation Ltd. (PICTC) as the sole provider of digital signatures for government departments, a move expected to improve governance and streamline public services.
Adopting Progressive Water Pollution Laws
The Cabinet also approved the adoption of the Water (Prevention and Control of Pollution) Amendment Act, 2024, which replaces criminal liability with financial penalties for violations of water pollution laws. This progressive approach is expected to simplify enforcement and enhance trust in governance.
Streamlining Administrative Procedures
In a move to simplify administrative processes, the Cabinet has approved amendments to the Punjab Registration of Births and Deaths Rules, 2025, aligning them with national standards to improve the efficiency of these services.
Conclusion: A Comprehensive Strategy for Punjab’s Growth
The approval of the Excise Policy for 2025-26 marks a critical step in the Punjab government’s efforts to increase revenue, streamline operations, and promote sustainable growth within the liquor industry. With significant reforms aimed at transparency, tourism, and investments, this policy is expected to have a lasting impact on Punjab’s economy and governance.