Excise policy in works, Punjab Govt eyes Rs 1K crore boost

The Punjab Government is planning to increase its revenue from the sale of liquor by approximately 6-7 per cent in the fiscal year 2025-26.

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The state Excise Department is finalising the liquor policy, which is expected to be presented for approval in the next meeting of the Council of Ministers later this month. The policy is currently under discussion by a Group of Ministers (GoM) headed by Finance Minister Harpal Cheema, along with ministers Kuldeep Singh Dhaliwal, Tarunpreet Singh Sondh and Harbhajan Singh.

A meeting of the GoM was held on Tuesday, during which the ministers suggested certain changes to the proposed policy and asked the department to revise it accordingly. Sources indicate that the AAP government is not planning any drastic changes to the existing excise policy. The open quota system for IMFL is likely to continue, although the government is still debating whether to renew existing licences or switch to a tender-based system to maximise revenue.

Liquor contractors, during their earlier meetings with excise officials, have opposed the tender-based system, arguing that it could lead to monopolistic practices. Interestingly, many contractors have also raised concerns about the open quota system, claiming it has caused significant losses due to oversupply in the market. This oversupply has triggered price wars and even led to the smuggling of IMFL from Punjab to other states, including Gujarat and Bihar.

Official sources revealed that the government aimed at increasing excise revenue by at least Rs 1,000 crore in 2025-26, compared to the current fiscal year’s target of Rs 10,145 crore. As of January, the state has already collected Rs 8,584.33 crore in excise revenue, putting it on track to surpass the annual target by the end of March. High liquor sales in districts like Mohali, Ludhiana, Amritsar, Patiala and Ropar have contributed significantly to the increased revenue, according to official sources.