The girl suffered severe burn injuries and was rushed to Mhow Civil Hospital by neighbours from her village Jamli near here.
She was later referred to government-run M Y Hospital in Indore, 25km away, for better treatment, said Badgonda Police Station's Assistant Sub-Inspector Gulab Singh Yadav.
The incident took place in the morning when her father Chagan Lal, a liquor addict, demanded money from her for buying alcohol. She refused to shell out money, which enraged Lal, who brought kerosene and sprinkled it over his daughter and set her ablaze, he said.