The Delhi government suffered cumulative losses of over Rs 2,000 crore due to the 2021-2022 excise policy for reasons ranging from weak policy framework to deficient implementation, according to a CAG report tabled in the assembly on Tuesday, sparking a fresh showdown between the Bharatiya Janata Party and the Aam Aadmi Party.
The report, one of 14 on the previous Aam Aadmi Party government's performance, was tabled by the new Chief Minister Rekha Gupta of the Bharatiya Janata Party on the very second day of the first session of the newly elected Delhi assembly.
The 208-page report including annexures flagged violations in the process of issuing licences and 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 chief minister and excise minister Manish Sisodia.
Sisodia, AAP chief and former Delhi chief minister Arvind Kejriwal and another senior party leader Sanjay Singh were arrested in the cases registered in connection with the alleged liquor policy scam, a hot button issue in the run-up to the recent Delhi assembly elections which saw the BJP returning to power after more than 27 years. The three leaders are currently out on bail.
Assembly Speaker Vijender Gupta said the document will be referred to the Public Accounts Committee of the House, that is yet to be formed, for looking into it and submit a report.
The report also highlighted how the policy spawned a cocktail of brand pushing and monopolies.
The 2021-22 Delhi excise policy created risks of monopolies and brand pushing by an "exclusive arrangement" between a few wholesalers and manufacturers, allowing the distributors to dominate the liquor supply chain with just three of the wholesalers controlling over 71 percent of total liquor supply chain in the city, it said.
"Audit noted that due to a number of issues ranging from weak policy framework to deficient implementation of the policy...there was a cumulative loss of approximately 2,002.68 crore," the Comptroller and Auditor General(CAG) said.
The report stated that the estimated cumulative revenue loss of Rs 2,002.68 crore to the government included losses due to opening of liquor vends in non-conforming municipal wards (Rs 941.53 crore), failure to re-tender, surrendered licences (Rs 890 crore), Covid-linked waiver to retail licensees (Rs 144 crore) and failure to properly collect security deposit (Rs 27 crore).
Senior AAP leader Atishi, who is the Leader of Opposition, defended the now-scrapped excise policy. At a news conference. the former chief minister claimed that its previous version according to the CAG report was marred by "corruption and smuggling".
All the 21 AAP MLAs including Atishi were absent from the House when the report was tabled. They were earlier suspended by the Speaker for shouting slogans during LG VK Saxena's first address to the newly constituted Assembly.
Atishi alleged that the BJP-appointed LG, the Central Bureau of Investigation, and the Enforcement Directorate obstructed the implementation of the liquor policy, causing an annual revenue loss of Rs 8,900 crore to Delhi.
She said seven out of the eight chapters in the CAG report highlight the shortcomings of the old excise policy, while only one focuses on the new policy.
"The AAP government always raised concerns about corruption in the old excise policy, which facilitated illegal liquor smuggling. The report shows that liquor shop owners engaged in corrupt practices, inflating prices and causing heavy losses to Delhi's exchequer," the former chief minister said.
Delhi BJP president Virendra Sachdeva alleged that Arvind Kejriwal acted as a "middleman for the liquor lobby". There was no immediate reaction from the AAP.
Addressing a press conference along with BJP MPs Manoj Tiwari and Praveen Khandelwal, Sachdeva said the report has exposed the “loot, corruption, and deception” allegedly carried out by the AAP government over the past decade.
Sachdeva claimed that the Kejriwal administration had been deliberately withholding the report to conceal financial irregularities, but with its release the truth is now out in the open.
The report was also taken up for discussion in the Assembly during which the BJP accused the AAP of suppressing the CAG findings to cover up alleged corruption.
The Speaker while opening the debate for the House members, cited various observations of the High Court regarding the alleged delay on part of the previous government to table the report in the Assembly.
"I am deeply agitated that these reports were suppressed, amounting to an intentional violation of the constitutional mandate," he said.
BJP MLA Arvinder Singh Lovely said the AAP is trying to find an escape route to avoid the CAG report, which exposes their alleged involvement in the liquor "scam".
The alleged irregularities in the formulation and implementation of the excise policy had snowballed into a political punching bag used by the BJP after LG Saxena recommended a CBI probe in July 2022.
The report stated that the group of ministers (GoM), headed by Sisodia, changed recommendations of the expert committee formed to formulate the policy.
Going against the recommendations of the committee, the GoM allowed private parties to handle wholesale liquor operations, introduced one time bidding instead of lottery system to allocate vends, allowing bidders to have 54 vends against recommended two per individual, it said.
According to the report, certain decisions with revenue implications were taken without having approval of the Cabinet and opinion of the lieutenant governor. These included relaxation from coercive action against defaulter licensees, waiver in license fee, refund of earnest money deposit in case of airport zone and correction in formulae to calculate maximum retail price of foreign liquor.
The remaining CAG reports covered among other subjects the Delhi state finances, public health infrastructure, vehicular air pollution, liquor regulation and the functioning of the Delhi Transport Corporation(DTC). They are expected to be tabled in the assembly in the coming days.
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