The Madhya Pradesh cabinet has approved the new excise policy, which calls for the closure of "ahatas," or drinking establishments connected to liquor stores, and shop bars.
The new excise policy, according to state home minister Narottam Mishra, is intended to reduce alcohol consumption. Mishra made the statement following the cabinet meeting on Sunday night.
This comes amid senior Bharatiya Janata Party (BJP) leader Uma Bharti's demand for a "controlled liquor policy" in MP.
Bharti, who began her campaign by calling for complete prohibition, is now pushing for the legalisation of alcohol sales in the state, where the Assembly elections are scheduled for this year's end.
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"All ahatas and shop bars are being shut in the state. Now, only liquor will be sold at the shops and places of drinking will not be allowed," Mishra, who is also the state government's spokesperson, said after the cabinet meeting.
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He added that the legislation governing the cancellation of driving licences in situations of drunk driving will be strengthened. He said the distance between liquor stores and educational institutions, ladies' hostels, and places of worship will be increased from 50 metres to 100 metres.
"Chief Minister Shivraj Singh Chouhan has been working to discourage drinking liquor so no new shop has been opened in the state since 2010. On the contrary, shops were closed," Mishra said.
During the Narmada Seva Yatra, 64 shops were closed in the state, he added.
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Bharti has been advocating against alcohol use and has urged the BJP-led Chouhan administration in MP not to take advantage of people's drinking habits by enacting a lax excise policy.
In Orchha, a town in the Niwari area known for its temples and palaces, she had chained two cows in front of a liquor store and encouraged people to drink milk instead of alcohol as part of her "madhushala mein gaushala" (cowshed in liquor vend) promotion.
She had also thrown dung at the shop in Orchha in protest against the sale of liquor.
(with inputs from PTI)