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Government of Madhya Pradesh
The Madhya Pradesh Cabinet, led by Deputy CM Jagdish Devda, has approved the Excise Policy for the financial year 2026–27, emphasizing a transition from shop renewals to a 100% e-tender and e-auction model.
To enhance transparency and eliminate fraud, the policy mandates that all 3,553 liquor shops be allotted via a competitive digital process, accepting only e-challans or e-bank guarantees as security.
Key Pillars of the MP Excise Policy 2026–27
Digital Allotment & Transparency: Discontinuing renewals in favor of a 100% e-tender and e-auction process with a 20% increase in reserve prices.
Social & Religious Conservation: Maintaining the 5 km “liquor-free zone” along the Narmada River and upholding bans in designated holy cities.
AHTA Closure & Regulation: Prohibiting all on-premises drinking facilities (ahatas) and ensuring no new liquor shops are opened in the state.
Ease of Doing Business (EoDB): Modernizing the manufacturing sector by removing prior price approvals and simplifying label registration for exports.
Heritage & Tribal Empowerment: Promoting Mahua-based liquor through reciprocal duty-free movement agreements with other states to support tribal entrepreneurs.
What is the “e-Auction for Liquor Allotment”? The e-auction process is a digital competitive bidding mechanism designed to ensure fair market value and transparency in the distribution of liquor licenses. Unlike the previous “renewal” system where existing shop owners could extend their licenses, the 2026–27 policy forces all 3,553 shops into a multi-phase digital auction. Shops are grouped (maximum of five per group) to encourage diverse participation. By accepting only electronic security deposits (e-challans), the state effectively eliminates the risks of “fraudulent manual guarantees” or paper-based manipulation, ensuring that only verified, financially capable bidders participate in the state’s revenue-generating sectors.
Policy Relevance
For Madhya Pradesh, the 2026–27 policy represents a transition from “Discretionary Licensing” to “Algorithmic Revenue Management,” aligning with India’s broader digital governance and ease-of-doing-business goals.
Standardizing Digital Allotment: By moving to a 100% e-auction model, MP acts as a “Standard Maker” move for other states seeking to eliminate “liquor syndicates” and manual interference in excise revenue.
Bypassing Pricing Delays: Allowing manufacturers to declare prices directly on portals without prior approval reduces administrative friction for the private sector.
Operationalizing Tribal Economy: The reciprocal duty-free provision for Mahua-based heritage liquor provides a formal market for tribal self-help groups, directly supporting the “inclusive growth” objectives of the National AIDS Strategy and other social inclusion frameworks.
Federal Compliance via e-Guarantees: Shifting exclusively to e-bank guarantees ensures that the state’s financial interests are protected against the “security fraud” risks identified in recent national financial audits.
Implementation Fidelity via River Conservation: The 5 km restriction along the Narmada serves as a template for “Environment-Centric Regulation,” balancing state revenue with the cultural and ecological preservation of national water bodies.
Relevant Question for Policy Stakeholders: What institutional mechanisms are needed to monitor the public health impact of closing on-premises drinking facilities (ahatas) on the reduction of public nuisance and related offenses?
Follow the full update here: MP Info: Cabinet Decisions on Excise Policy 2026–27