A report by the Comptroller and Auditor General (CAG) has shown that the Delhi government’s old liquor policy caused a loss of Rs 2,002 crore in revenue. The report was presented in the Delhi Assembly today by Chief Minister Rekha Gupta. However, AAP MLAs disagreed with it and opposed its presentation, which led to their suspension.
The liquor policy scam, which involved large financial mismanagement, led to the arrest of top AAP leaders, including party chief Arvind Kejriwal, former deputy Manish Sisodia, Rajya Sabha MP Sanjay Singh, and former Delhi Minister Satyendar Jain.
The current BJP government in Delhi has announced that it will present all 14 pending CAG reports during the ongoing Assembly session.
The CAG report on the liquor policy, covering the period from 2017-18 to 2020-21, showed that the Delhi government lost about Rs 890 crore because it did not re-tender surrendered licenses. It also showed delays in taking action caused a loss of Rs 941 crore due to exemptions provided to zonal licensees.
One of the most debated findings was the Rs 144 crore waiver given to licensees from December 28, 2021, to January 27, 2022, due to Covid-19 restrictions.
The CAG pointed out that the waiver contradicted the Excise Department’s position, leading to even more revenue loss. It also highlighted a Rs 27 crore shortfall due to the improper collection of security deposits from zonal licensees. Other major irregularities mentioned in the report include:
Violation in issuing license
The CAG report found violations in the way licenses were issued under the Kejriwal-led AAP government. Rule 35 of the Delhi Excise Rules, 2010, which prevents issuing multiple licenses, was not followed. Some retailers kept licenses until the policy expired, while others gave them up early, causing supply issues.
Apart from this, licenses were granted without checking the requirements, like financial stability, audited statements, sales data, and criminal background checks.
IMFL pricing not clear
The CAG report found that when looking at the prices and sales of some Indian-made foreign liquor (IMFL) brands, the system of setting the ex-distillery price (EDP) caused a decrease in sales and a loss in revenue. The Excise Department lets L1 license holders set the EDP for liquor priced above a certain amount. However, other costs, like the manufacturer’s profit, were added later. This gave L1 licensees the chance to change the prices to their advantage.
Poor quality control
The report said the CAG found many cases where liquor test reports didn’t follow the standards set by the Bureau of Indian Standards. Important tests for things like water quality, harmful ingredients, heavy metals, and alcohol were missing for some brands. Some tests were also done by labs that were not allowed to do them. Also, more than half of the test reports for foreign liquor were either more than a year old or didn’t have a date on them.