The Comptroller and Auditor General (CAG) has alleged that the Delhi government incurred cumulative losses exceeding Rs 2,000 crore due to the 2021-2022 excise policy. The findings were part of the CAG report titled ‘Performance Audit on Regulation and Supply of Liquor in Delhi,’ which was tabled in the Delhi Legislative Assembly on Tuesday by Chief Minister Rekha Gupta.
The report pointed to severe deficiencies in both the design and execution of the excise policy, citing weak frameworks, inadequate planning, and major lapses in implementation. It identified multiple violations related to quality control, licensing, pricing, and enforcement. The audit also underscored that key decisions were made without the necessary approvals from competent authorities, stressing the need for accountability.
The biggest loss, estimated at Rs 941.53 crore, stemmed from the failure to secure timely permissions for opening liquor vends in designated “non-conforming municipal wards.” These areas did not meet the required land-use regulations for such establishments.
Another loss of Rs 890.15 crore was attributed to the surrender of licenses from certain zones, which the excise department failed to re-tender.
The government suffered an additional Rs 144 crore loss due to an “irregular grant” of waivers to licensees in the wake of Covid-related closures.
The report noted that the excise policy mandated the opening of liquor vends in non-conforming areas, contradicting the guidelines set in the Master Plan for Delhi 2021.
The Delhi Development Authority (DDA) had prohibited liquor vends in these areas, leading to regulatory complications and financial setbacks.
Licenses for new liquor vends were issued in August 2021, even before resolving the legal status of non-conforming areas, leading to uncertainty and further losses.
A total of 19 zonal licensees surrendered their licenses before the policy’s expiry in August 2022.
Liquor retailers approached the Delhi High Court, which ruled in December 2021 that licensees in 67 non-conforming wards would be exempt from paying fees, causing a monthly loss of Rs 114.50 crore.
The alleged irregularities in the policy’s formulation and execution became a major political flashpoint, with the Bharatiya Janata Party (BJP) seizing on the issue. In July 2022, Lieutenant Governor V K Saxena recommended a CBI probe into the matter. Several top Aam Aadmi Party (AAP) leaders, including Arvind Kejriwal, Manish Sisodia, and Sanjay Singh, were arrested in connection with the case and spent months in jail.
Chief Minister Rekha Gupta has assured that the government will make CAG reports public in upcoming legislative sessions. These reports cover various governance aspects, including the Delhi Transport Corporation’s functioning, air pollution control measures, and state finances.
The findings of the CAG report are expected to fuel further political debates and intensify scrutiny over Delhi’s excise policy decisions in the coming months.
