Punjab Clears New Excise Policy, Allows Single Malt Units; Sets INR 12,800 Crore Revenue Target

The Punjab government has announced a landmark Excise Policy for 2026-27, projecting a robust excise revenue target of INR 12,800 crore for the next financial year, Finance Minister Harpal Singh Cheema said on 23rd February, Monday. The policy emphasises transparency, enforcement against illicit liquor trade, support for businesses, and a major step towards industrial self-reliance by allowing malt manufacturing units within the state.

A New Revenue Trajectory

Finance Minister Cheema highlighted that the state’s excise revenue has seen a consistent upward trend since the introduction of reforms by the current government in 2022-23. He provided a comparative historical analysis:

• Under the SAD-BJP regime (2011-12), excise revenue stood at INR 2,755 crore.
• During the subsequent Congress government in 2021-22, it rose modestly to INR 6,255 crore.
• Following the 2022 reforms under the Bhagwant Singh Mann-led government, collections jumped to INR 8,428 crore.
• Revenue climbed further to INR 10,744 crore in 2024-25 and met the INR 11,200 crore target for 2025-26.
• The new target for 2026-27 is INR 12,800 crore – an ambitious but continuation-oriented projection.

Cheema stressed that excise collections have shifted from being a narrow revenue source to one that “directly strengthens public welfare” by funding schools, hospitals, and other pro-people schemes.”

Key Provisions Of The 2026–27 Excise Policy

Retail Licence Reforms

To streamline operations and support existing vendors:

• Current retail licences will be renewed at a 6.5 % higher fee compared with the 2025-26 fees.
• Licences not renewed will be re-allotted through a transparent e-tender process to maintain fairness and curb irregularities. 

Market Regulation And Quota Adjustments

• The quota for Punjab Medium Liquor (PML), at 50 and 65 degrees, has been increased by 3 % to 8.79 crore proof litres to meet regulated demand while preventing supply disruptions.
• To crack down on illegal liquor, the government will introduce 40-degree PML sub-vends in areas designated as high-crime zones under the Excise Act. 

A Shift Toward Industrial Value-Addition: Malt Manufacturing

In one of the most significant departures from past practice, the policy now permits malt manufacturing units within Punjab - including barley processing and premium malt whisky distillation. This move aims to:

• Transition Punjab’s liquor economy from largely downstream bottling of imported spirits to value-added local production.
• Reduce dependence on external suppliers for raw spirit inputs.
• Build a farm-to-factory ecosystem that can enhance the value of the agricultural supply chain.
• Create specialised employment opportunities in technical and industrial segments. 

Cheema described this as part of a strategic shift toward high-value industrial activity within the state. 

Stronger Enforcement Against Illicit Trade

Punjab’s zero-tolerance policy against illegal liquor continues with intensified enforcement efforts:

• Enforcement agencies have registered 4,406 FIRs and arrested 4,324 individuals.
• Operations included 26,218 raids and the establishment of 24,832 checkpoints.
• Confiscations included 455 vehicles and 1,76,552 bottles of liquor.

These figures were cited by Cheema as evidence of the government’s commitment to tightening the noose around illicit alcohol networks. 

Implications For The State Economy And Public Sector Funding

The enlarged revenue target is expected to bolster spending on priority areas such as education, healthcare, and welfare schemes, helping reduce reliance on borrowing and external assistance.

Cheema has consistently framed excise reform as an instrument for funding pro-people initiatives while maintaining regulatory discipline.

Though the policy does not raise liquor retail rates per se, broader licence fee adjustments and structural changes in fees may have downstream effects on consumer pricing in FY 2026–27.

Looking Ahead: Challenges And Opportunities

While the policy consolidates revenue growth and opens opportunities for industrial diversification, its success in implementation – especially regarding malt unit establishments – will depend on regulatory clarity, investor response, and market adaptation.

The enhanced enforcement regime underscores the state’s resolve against illicit trade, which could both stabilise market credibility and protect public safety.

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Summing Up

The Punjab Excise Policy 2026–27, as set out by the state government and reported by PTI, represents a decisive effort to:

• Target a record INR 12,800 crore in excise revenue,
• Enable malt manufacturing units for the first time,
• Strengthen enforcement and regulatory mechanisms, and
• Redirect excise gains towards public welfare programmes.

By marrying fiscal ambition with governance reforms, Punjab is seeking to reshape its excise landscape toward growth-oriented, transparent, and socio-responsible outcomes ahead of the new financial year.