THEBUSINESSBYTES BUREAU

BHUBANESWAR, MARCH 26, 2026

The Odisha government has announced a comprehensive new three-year excise policy that will come into effect from April 1, 2026, and remain in force until March 31, 2029, marking a significant shift in the state’s approach towards regulation of the liquor trade and promotion of public health initiatives.

For the first time, the state has officially recognised alcohol consumption as a harmful habit by introducing a 0.5 per cent “De-Addiction Cess” on excise duty. The revenue generated from this cess will be utilised exclusively for establishing and operating model de-addiction centres across Odisha, signalling a stronger focus on rehabilitation and social well-being.

Announcing the policy in the Odisha Assembly on Thursday, Excise Minister Prithviraj Harichandan said the move from an annual excise policy to a structured three-year framework is aimed at bringing greater regulatory stability to the liquor sector while strengthening de-addiction measures in the state.

Under the new policy, liquor shops will no longer be permitted on either side of the Grand Road (Bada Danda) near the Sri Jagannath Temple in Puri. The government has also imposed a complete prohibition on home delivery of liquor across the state. Additionally, no new off-shops, country liquor outlets or out-still shops will be allowed, and new on-shop licences in rural areas will not be issued. Such permissions will be limited to industrial zones and will apply only to three-star and above hotels and clubs.

All country liquor manufacturing units will be required to obtain mandatory FSSAI certification. To curb illegal trade, a Track and Trace system will be implemented across manufacturing units and retail outlets, supported by compulsory CCTV surveillance with direct monitoring from the office of the Excise Commissioner.

The policy also introduces financial revisions, including an increase in annual licence fees by 10 to 20 per cent and a 10 per cent hike in application fees for various excise licences. Excise duty on Indian Made Foreign Liquor (IMFL) and country liquor has also been raised, which is expected to increase retail prices.

In a major reform aimed at easing pressure on legitimate businesses, the government has scrapped the earlier Minimum Guaranteed Quantity (MGQ) system and replaced it with a Minimum Guaranteed Excise Revenue (MGER) system, a step expected to discourage illegal “kuchia” (spurious) sales.

Furthermore, all Odisha State manufacturing units have been directed to undertake mandatory modernisation, adopt improved packaging and secure FSSAI certification. Units completing modernisation within the stipulated timeframe will be eligible for government incentives. The state’s excise chemical laboratories will also undergo strengthening and modernisation.

The new policy is being positioned as a balanced approach that tightens oversight of the liquor trade while generating dedicated funds for de-addiction and rehabilitation initiatives, reinforcing the government’s dual focus on regulation and public health.