March 1, New Delhi: A recent report by the Comptroller and Auditor General (CAG) has revealed significant financial losses amounting to over ₹2,000 crore due to flaws in the 2021-22 liquor policy implemented by the Aam Aadmi Party (AAP) government in Delhi. The report, tabled in the Delhi Assembly on Tuesday, is part of 14 performance reviews conducted on the AAP government’s administration. It highlights serious lapses in policy formulation and implementation, procedural violations, and the disregard of expert recommendations, leading to substantial revenue losses for the state.
Key Findings of the CAG Report
The CAG report pointed out that Manish Sisodia, the then then-deputy chief Minister and Excise Minister, overlooked critical suggestions from an expert panel while drafting the now-scrapped liquor policy. The policy’s flawed execution resulted in multiple financial setbacks, including:
- Loss of ₹890.15 Crore: This loss occurred due to the surrender of licenses by zonal operators and the Excise Department’s failure to re-tender these zones, leading to a complete halt in revenue collection from these areas.
- Irregular Waiver of ₹144 Crore: The report flagged an unjustified waiver of ₹144 crore granted to license holders, citing Covid-19 restrictions. This decision was personally approved by Sisodia despite objections from the finance department.
- Violation of Delhi Master Plan 2021: The report highlighted that the Excise Policy 2021-22 mandated the establishment of at least two retail liquor vends in each ward, even in non-conforming areas where such vends were prohibited under the Delhi Master Plan. Despite tender documents explicitly stating that liquor stores should not be set up in these zones, licenses were issued without addressing zoning concerns. This led to legal disputes, with the Delhi Development Authority (DDA) disallowing vendors in non-conforming areas in November 2021. Licensees subsequently approached the High Court, which exempted them from paying ₹114.50 crore per month in license fees, further exacerbating the financial losses.
Procedural Lapses and Policy Failures
The CAG report also exposed several procedural irregularities in the implementation of the liquor policy:
- Surrender of Licenses: Nineteen zonal licensees surrendered their licenses before the policy expired in August 2022. No re-tendering process was initiated, resulting in a complete loss of revenue from these zones.
- Unjustified Waivers: The waiver of license fees was granted despite strong objections from the finance department, raising questions about the decision-making process.
- Alteration of Expert Recommendations: The Group of Ministers (GoM), led by Manish Sisodia, modified key recommendations from the expert committee. Notably, the number of retail outlets allowed per bidder was increased from 2 to 54, favoring private wholesalers.
- Lack of Approval for Major Decisions: Several decisions with significant financial implications were taken without the approval of the Cabinet or the Lieutenant Governor (LG), further highlighting the lack of oversight and accountability.
Political Fallout and Allegations of Corruption
The CAG report has intensified the political battle between the AAP and the Bharatiya Janata Party (BJP). The BJP has long accused the AAP government of corruption and mismanagement in the liquor policy, using it as a central issue to criticize the administration. Following a recommendation by Lieutenant Governor VK Saxena in July 2022, the Central Bureau of Investigation (CBI) launched a probe into the matter. This investigation led to the arrest of several AAP leaders, including Chief Minister Arvind Kejriwal, former Deputy CM Manish Sisodia, and MP Sanjay Singh, who spent months in jail.
Extension of Delhi Assembly Session
In light of the CAG report’s findings, the Delhi Assembly session has been extended to allow for a thorough discussion on the issue. The report’s revelations are expected to fuel further debates and political confrontations, with the BJP likely to intensify its criticism of the AAP government’s handling of the liquor policy.
The CAG report has brought to light significant financial and procedural lapses in the AAP government’s 2021-22 liquor policy, resulting in losses exceeding ₹2,000 crore. The findings have not only exposed flaws in policy formulation and implementation but also raised serious questions about governance and accountability. As the political fallout continues, the report underscores the need for greater transparency and adherence to due process in policymaking to prevent such losses in the future.
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