Last Updated:February 25, 2025, 13:13 IST
The report pointed out that recommendations of an expert panel, formed to suggest changes for the formation of the now scrapped policy, were ignored by then deputy CM and excise minister Manish Sisodia
Delhi LG VK Saxena speaks to the media after addressing the Delhi Assembly during its first session, in New Delhi, Tuesday, Feb. 25. (PTI photo)
A new report by the Comptroller and Auditor General (CAG) has raised serious concerns over the Delhi government’s 2021-2022 excise policy, revealing that the government incurred cumulative losses of over Rs 2,000 crore.
The CAG report, titled ‘Performance Audit on Regulation and Supply of Liquor in Delhi,’ was tabled in the Delhi Legislative Assembly on Tuesday by Chief Minister Rekha Gupta.
The report highlighted several issues with both the design and execution of the policy, including weak policy frameworks, inadequate planning, and significant lapses in implementation.
The audit also identified multiple violations in areas such as quality control, licensing, pricing, and enforcement. It points out that decisions were made without proper approval from the competent authorities and stresses that accountability must be established for these lapses.
Losses From Liquor Policy
According to the CAG, the Delhi government incurred losses from multiple sources. The biggest loss, estimated at Rs 941.53 crore, was due to the failure to obtain timely permissions for opening liquor vends in areas designated as “non-conforming municipal wards”.
Non-conforming areas are zones that do not meet the land use regulations required for the establishment of liquor vends.
In addition to this, the excise department faced further losses of Rs 890.15 crore due to the surrender of licences from certain zones, along with the failure to re-tender licences after they were surrendered.
Another Rs 144 crore was lost due to “irregular grant” of waiver to the licensees because of Covid pandemic related closure.
Weaknesses In Policy Design & Implementation
The CAG report highlighted flaws in both the design and implementation of the policy. It criticised the previous AAP government for disregarding recommendations made by an expert panel assigned to suggest changes to the excise policy.
The report also pointed out that Manish Sisodia, who was the Deputy Chief Minister and Excise Minister at the time, ignored these recommendations and made key decisions that directly contributed to the losses.
One of the critical issues identified was that the Excise Policy mandated the opening of liquor vends in non-conforming areas, which was against the guidelines of the Master Plan for Delhi 2021.
These non-conforming areas were not approved for liquor vends, yet the policy went ahead with such plans, ultimately causing legal and regulatory complications. The Delhi Development Authority (DDA) issued an order disallowing liquor vends in these areas, resulting in further losses.
Licensing Issues & Court Orders
The CAG report also highlighted the excise department’s failure to manage the licensing process effectively. Licences for new liquor vends were issued in August 2021, even before regulatory issues related to non-conforming areas were addressed.
The report noted that 19 zonal licensees surrendered their licences before the policy expired in August 2022 — four in March 2022, five in May 2022, and ten in July 2022.
Additionally, the report revealed that some liquor retailers approached the Delhi High Court due to the government’s failure to resolve these regulatory issues. On December 9, 2021, the court exempted them from paying any licence fee for mandatory vends in 67 non-conforming wards, resulting in a monthly licence fee exemption of Rs 114.50 crore.
(With inputs from agencies)