Delhi Incurred Losses of Over Rs 2,000 Crore Due to Flaws in 2021-22 Liquor Policy, CAG Report Reveals

In a bombshell revelation, the Comptroller and Auditor General (CAG) of India, in a report tabled in the Delhi Assembly on Tuesday, has highlighted significant flaws in the 2021-22 liquor policy implemented by the previous Aam Aadmi Party (AAP) government. The report estimates a loss of over Rs 2,000 crore due to policy lapses, procedural violations, and ignored expert recommendations.

Key Findings from the CAG Report

• The CAG's performance review, one of 14 scrutinizing the AAP government’s administration, details several irregularities in the formation and execution of the liquor policy. The report specifically criticizes former Deputy Chief Minister and Excise Minister Manish Sisodia for disregarding expert panel suggestions while drafting the now-scrapped policy.
• The Delhi government incurred a direct revenue loss of Rs 941.53 crore due to the failure to obtain necessary permissions for opening liquor vends in non-conforming municipal wards, areas not designated for liquor sales under existing zoning laws. Additionally, the Excise Department suffered a loss of Rs 890.15 crore due to the surrender of licenses and the failure to re-tender liquor zones.
• The report also draws attention to an irregular waiver of Rs 144 crore granted to license holders, citing Covid-19 restrictions, which was approved by Sisodia despite objections from the Finance Department.

Policy Violations and Procedural Lapses

• The report further reveals a violation of the Delhi Master Plan 2021, which prohibited liquor vends in non-conforming areas. Despite this, the Excise Policy 2021-22 mandated the setting up of at least two retail vends in each ward. The CAG found that the issuance of licenses continued despite clear instructions prohibiting liquor stores in such areas, and concerns raised by the Delhi Development Authority (DDA) were ignored.
• The report also highlights serious procedural violations in the awarding of liquor licenses. It claims that the AAP government failed to enforce Rule 35 of the Delhi Excise Rules, 2010, which prevents the issuing of multiple licenses. In several instances, licenses were granted without verifying crucial requirements like solvency, audited financial statements, and criminal antecedents of applicants.

Lack of Transparency and Quality Control

• One of the significant points raised in the CAG report is the lack of transparency in the pricing of liquor. The report suggests that the discretionary powers granted to license holders allowed manipulation of liquor prices, leading to a decline in sales and subsequent revenue loss for the government.
• The report also noted inadequate quality control measures, with several liquor brands failing to comply with the specifications set by the Bureau of Indian Standards. In many instances, test reports for liquor quality were not submitted or were outdated, posing serious health and safety concerns.

Political Tensions Escalate in the Delhi Assembly

• The liquor policy controversy has sparked significant political tensions. On the same day the CAG report was tabled, 15 AAP MLAs, including former Chief Minister Atishi, were suspended from the Delhi Assembly following a heated face-off with the ruling Bharatiya Janata Party (BJP). The BJP accused the AAP of lying about the alleged removal of photographs of Dr. BR Ambedkar and Bhagat Singh from the Chief Minister's office.
• In response, AAP MLAs raised slogans and displayed photographs of the two leaders, leading to an adjournment of the Assembly session. The BJP dismissed AAP's claims, releasing videos showing that the photographs of Ambedkar and Bhagat Singh had been moved to the sidewalls rather than removed.

Political Fallout and Arrests

• The alleged financial irregularities and policy lapses linked to the liquor policy have already led to arrests of senior AAP leaders, including Chief Minister Arvind Kejriwal, former Deputy CM Manish Sisodia, Rajya Sabha MP Sanjay Singh, and former Minister Satyendar Jain. The controversy has cast a shadow over the AAP government's administration and is likely to continue dominating Delhi's political landscape.
• As the ongoing Assembly session unfolds, the BJP has announced that it will table all 14 pending CAG reports, further intensifying the political battle surrounding the liquor policy scam.