The Comptroller and Auditor General (CAG) report delivered to Delhi Assembly on Tuesday shows that the discontinued liquor policy enacted in November 2021 before its elimination in September 2022 caused the Delhi government to lose Rs 2,002.68 crore.
The policy enacted by the previous AAP government burdened themselves and led figures including Chief Minister Arvind Kejriwal and Deputy Chief Minister Manish Sisodia in prison. Large scale corruption possibly led AAP to lose the latest Assembly election that allowed BJP to establish government in Delhi after 26 years.
The report identifies loss categories during the Assembly disruption when fifteen AAP MLAs received suspensions. The main revenue loss of Rs 941.53 crore occurred due to the inability of liquor outlets to open in areas forbidden by the new land use restrictions.
The government incurred Rs 890.15 crore in losses due to the failure to provide tenders for 19 zones that received license surrender. The report states there was no excise-based revenue collection from the surrendered zones afterward because the government failed to establish any substitute retail system.
The government incurred Rs 144 crore in fee waivers to licensees who invoked COVID-19 as an excuse and Rs 27 crore from improper collection of security deposits from zonal licensees. The total deregistration-related losses amount to Rs 2,002.68 crore as computed in these four sections.
The CAG report pointed out additional violations which showed the Delhi Excise department improperly handled Rule 35 of the Delhi Excise Rules that banned related parties from getting multiple permits including wholesaler, retailer, HCR (hotel, clubs and restaurants). Multiple sources confirm that select people obtained advantages from this practice.
The increased wholesaler margin from 5% to 12% received special opposition from critics of the policy. The Enforcement Directorate evidence showed AAP leaders planned to take 6% from the total 12% wholesale profit which wholesalers were supposed to collect.
A CAG report deemed the reasoning for this margin hike insufficient because government-quality testing facilities never became operational and transportation expenses failed to substantiate such big margin percentage growth.
