A report by the Comptroller and Auditor General of India (CAG) has revealed that the now-scrapped liquor policy implemented by the former Aam Aadmi Party (AAP)-led government in Delhi resulted in an overall revenue loss of ₹2,002 crore. The report was tabled in the Delhi Assembly today by Chief Minister Rekha Gupta, amidst strong opposition from AAP MLAs. Their protest against the report’s presentation led to their suspension from the House.
AAP Leaders Arrested Amid Liquor Policy Scam
The liquor policy, which was marred by allegations of financial irregularities, led to the arrests of several top AAP leaders. Among them were party chief Arvind Kejriwal, former deputy chief minister Manish Sisodia, Rajya Sabha MP Sanjay Singh, and former Delhi minister Satyendar Jain. The scam has remained a focal point of political controversy in the national capital.
Pending CAG Reports to Be Tabled by BJP Government
The incumbent BJP government in Delhi has announced its plan to table all 14 pending CAG reports during the ongoing Assembly session. The latest CAG report on the liquor policy covers a period of four years, from 2017-18 to 2020-21, highlighting significant revenue losses due to procedural lapses and irregularities in implementation.
Key Revenue Losses Identified in CAG Report
The audit report has detailed specific instances of revenue loss amounting to ₹2,002 crore. One of the major findings was the Delhi government’s failure to re-tender surrendered licences, which resulted in an estimated loss of ₹890 crore. Additionally, delays in taking action led to further losses of ₹941 crore due to exemptions granted to zonal licensees.
Violations in Awarding Liquor Licences
One of the most glaring issues highlighted by the report was the violation of licensing norms. The Kejriwal-led government failed to ensure the proper implementation of Rule 35 of the Delhi Excise Rules, 2010, which prohibits multiple licences being issued to a single entity. While some retailers held on to their licences until the policy’s expiration, others surrendered them early, creating disruptions in supply.
The absence of an advance notice requirement for licence surrender further aggravated the situation. Moreover, the government issued licences without proper scrutiny, failing to check essential criteria such as solvency, submission of audited financial statements, sales data, and criminal background verification of applicants.
Lack of Transparency in Pricing of IMFL
The CAG report also highlighted serious discrepancies in the pricing of Indian-made foreign liquor (IMFL). The audit found that the Excise Department allowed L1 licence holders to declare their own ex-distillery price (EDP) for liquor priced above a certain level. However, this discretionary pricing mechanism led to revenue losses as it allowed L1 licensees to manipulate liquor prices for their own benefit.
“The Excise Department permitted L1 licensees to determine the ex-distillery price, after which all additional price components, including manufacturer profits, were added later,” the report stated. The lack of proper regulation over this pricing system resulted in reduced liquor sales and subsequent revenue loss for the Delhi government.
Conclusion
The findings of the CAG report have intensified the political battle over the controversial liquor policy. With the BJP government vowing to bring further scrutiny to the financial dealings of the previous administration, the fallout from this scandal is likely to continue shaping the political landscape in Delhi.
4o
