Delhi govt lost ₹2,000 cr due to liquor policy: CAG

New Delhi: The Delhi government incurred total losses of over ₹2,000 crore due to the 2021-2022 excise policy for reasons ranging from weak policy framework to deficient implementation, according to a CAG report tabled in the assembly on Tuesday.

The report, tabled by Chief Minister Rekha Gupta, also flagged violations in the process of issuing licences. It has pointed out that recommendations of an expert panel, formed to suggest changes for the formation of the now scrapped policy, were ignored by then deputy chief minister and excise minister Manish Sisodia.

The report on the alleged liquor scam, a hot-button issue in the run-up to the elections, claimed a loss of revenue to the tune of ₹941.53 crore, saying timely permissions were not taken for opening the liquor vends in “non-conforming municipal wards”. Non-conforming areas are areas which do not conform to land use norms for opening liquor vends.

"The excise department suffered a loss of approximately ₹890.15 crore on account of license fee from these zones owing to their surrender and failure of the department in re-tendering," the report added. Besides, there was a loss of revenue to the tune of ₹144 crore due to "irregular grant" of waiver to the licensees because of the COVID pandemic-related closure, the report said.

The alleged irregularities in the formulation and implementation of the policy had snowballed into a political punching bag used by the BJP after Lt Governor V K Saxena recommended a CBI probe in July 2022. Top leaders of AAP, including Arvind Kejriwal, Sisodia and Sanjay Singh, have spent months in jail after probe agencies arrested them in the case.

The report stated that the group of ministers (GoM), headed by then deputy CM and Excise Minister Manish Sisodia, changed recommendations of the expert committee formed to formulate the policy. Going against the recommendation of the committee, the GoM allowed private parties to handle wholesale liquor operations and introduced one-time bidding instead of a lottery system to allocate vends, allowing bidders to have 54 vends against the recommended two per individual, it said.

According to the report, certain decisions with revenue implications were taken without having the approval of the Cabinet and the opinion of the lieutenant governor. These included relaxation from coercive action against defaulter licensees, waiver in license fee, refund of earnest money deposit in case of airport zone, and correction in formulae to calculate maximum retail price of foreign liquor.

The BJP has been alleging that the reports were withheld by the AAP administration. Delhi Chief Minister Rekha Gupta had announced last Thursday that the reports would be made public in the first session under the new government. The pending CAG audits include reviews of state finances, public health infrastructure, vehicular air pollution, liquor regulation and the functioning of the Delhi Transport Corporation, among others.