During the ongoing Delhi Assembly session, the Comptroller and Auditor General (CAG), in a shocking revelation, placed in the Assembly a report pointing towards a loss of over ₹2,000 crore of exchequer earnings for the Delhi government from the now-defunct 2021-22 excise policy. By the Chief Minister Rekha Gupta, the report attributed these losses to an inept policy framework and poor implementation.
Key Findings of the CAG Report
The CAG performance audit that makes the report is titled “Performance Audit on Regulation and Supply of Liquor in Delhi,” spanning four years, from 2017-18 to 2020-21, which is on the regulation and supply of Indian Made Foreign Liquor (IMFL) and foreign liquor in the National Capital Territory. It states that several sensitive issues have emerged from it:
Revenue Losses: The report estimates ₹941.53 crore as the revenue loss because of failure to get timely permissions for opening liquor vends in non-conforming municipal wards, those not designated for liquor sale under existing zoning law.
Licensing Irregularities: A further loss of ₹890.15 crore was caused by the surrendering of licenses in some zones, and the excise department did not initiate a re-tendering process for those areas.
Illegal Waivers: The audit claimed irregular waivers of ₹144 crore to licensees on account of COVID-19 pandemic closures. The decision was reportedly taken by the then Deputy Chief Minister and Excise Minister Manish Sisodia despite opposition from the finance department.
Flaws in the Policy Implementation
The CAG report identifies significant lapses in its execution:
Non-Conforming Areas: While the Delhi Master Plan 2021 prohibits liquor vends in non-conforming zones, the 2021-22 excise policy demanded at least two retail vends in each ward. Licenses were issued without resolving zoning issues, which has led to a spate of legal struggles that have resulted in financial losses.
Surrendered Licenses: Before the end of the policy in August 2022, licenses of 19 zonal licensees were surrendered. The excise department did not conduct re-tendering for this zone and lost revenue altogether from these areas.
Waiver Approvals: According to the report, the finance department proposed that no proportional waiver in license fees should be considered because of COVID restrictions since the tender documents did not provide for any waiver at all. The proposal deposed life revenues, by the Excise Minister.
Political Backlash and Assembly Proceedings
The CAG report being deemed and tabled has heightened political tensions in the Delhi Assembly. The Bharatiya Janata Party (BJP) government led by Chief Minister Rekha Gupta accused the erstwhile Aam Aadmi Party (AAP) government of massive financial irregularities and corruption. Leaders of the BJP decried that the report reveals too much about the black deeds of the previous government and made pledges to hold them all accountable.
The AAP members protested vehemently, claiming that the BJP was just trying to divert public attention into its own failures. The ensuing ruckus led to the suspension of 21 AAP MLAs, including key leaders Atishi and Gopal Rai, from the assembly proceedings.
Future Prospects
The CAG report is expected to have enormous implications:
Legal Actions: The government may file legal action against former officials on whose shoulders the indictment in the report fell and who would face an indictment and further investigations.
Evolution of the Policy: A drastic review and rewriting of the excise policy are expected to be undertaken to prevent such mishaps from occurring again, with strong checks on and balances with the introduction of the policy to avoid anything like this.
Public Confidence: The findings might change customer perceptions and confidence towards government practices and create a clarion call for transparency and accountability in public administration.
