Delhi govt suffered losses of Rs 2,000 cr due to liquor policy: CAG report

New Delhi: The Delhi government suffered a loss of Rs 2,002.68 crore due to the implementation of the excise policy 2021-22 during the Arvind Kejriwal-led government, the Comptroller and Auditor General (CAG) report tabled in Delhi Assembly on Tuesday said.

This included issues related to opening of liquor vends in non-conforming municipal wards (Rs 941.53 crore), failure to re-tender, surrendered licence (Rs 890.15 crore), Covid-19-linked waiver to retail licensees (Rs 144 crore) and failure to properly collect security deposit (Rs 27 crore), the report said.

This is one of the 14 reports, which was not tabled during the tenure of the previous AAP government. The CAG report on excise policy has said that weak policy framework and deficient implementation among others led to the losses to the exchequer.

It said then Deputy Chief Minister Manish Sisodia, who was also in charge of the Excise Department, ignored the recommendations of an expert panel, which was formed to suggest changes to the now scrapped policy.

While the policy was aimed at disrupting the monopoly in retail trade of liquor in Delhi, the report said that it did the opposite.

"The wholesale distribution of liquor was largely controlled (71.70 per cent) by three entities Indospirit, Brindco and Mahadev Liquor. The former two also exclusively supply brands of United Spirits (Diageo), United Breweries (Heineken) and Pernod Ricard, three of the largest domestic manufacturers of liquor," the report said. Also, it said, just 22 private entities were given license to run 849 liquor vends dispersed over 32 zones.

The report noted, "In spite of being aware that vends were required to be opened in non-conforming wards in order to achieve the objective of equitable distribution, the Department did not take timely action to work out modalities leading to non-achievement of the objective. It also resulted in loss of revenue of approximately Rs 941 crore due to exemptions which had to be given to the zonal licensees."

The Master Plan Delhi-2021 prohibited opening of liquor vends in non-conforming areas but the Excise Policy 2021-22 mandated opening at least two retail vends in each ward, it said.

It also said, "while some retailers retained licenses till the expiry of the policy period, some surrendered the same before the policy period was over. As retail licensees were limited in numbers, it caused disruption in supply because the Policy did not contain any provision requiring the licensees to give advance notice before surrendering the license.”

Further, it said there was revenue loss of approximately Rs 890.15 crore to the government as it did not retender the surrendered retail licenses.