The report, tabled by the BJP-led government, also highlighted violations in issuing licenses. It stated that former deputy chief minister and excise minister Manish Sisodia ignored an expert panel’s recommendations for the now-scrapped policy.
The report claimed that the government lost ₹941.53 crore in revenue because liquor vends were opened in “non-conforming municipal wards” without proper permissions. These are areas where liquor vends are not allowed based on land use rules.
The excise department reportedly lost ₹890.15 crore in license fees due to the surrender of licenses in these zones and failure to re-tender them. The report also noted a revenue loss of ₹144 crore due to an “irregular grant” of waivers to licensees during the Covid-related closure.
The alleged irregularities led to a political controversy after Lt Governor VK Saxena recommended a CBI probe in July 2022. Several AAP leaders, including Arvind Kejriwal, Manish Sisodia, and Sanjay Singh, were jailed in connection with the case.
The report said that while the Master Plan Delhi-2021 prohibited liquor vends in non-conforming areas, the Excise Policy 2021-22 required at least two retail vends in each ward. The tender document had stated that no liquor store would be in a non-conforming area unless approved by the government.
However, the excise department did not seek necessary approvals before issuing tenders on June 28, 2021. Licenses were allotted in August 2021, and vends were to start operating from November 17, 2021. But the Delhi Development Authority (DDA) issued an order on November 16, 2021, banning liquor vends in these areas. Licensees challenged this in the court, and on December 9, 2021, the court exempted them from paying license fees for 67 affected wards, leading to a loss of ₹941.53 crore.
The report also noted that 19 zonal licensees surrendered their licenses before the policy ended in August 2022, but the excise department did not re-tender them. This resulted in a loss of revenue from these zones, and no alternative arrangements were made for liquor retail.
Licensees sought a waiver of license fees for the period from December 28, 2021, to January 4, 2022, due to Covid restrictions. The high court directed the excise department to review the request. The excise and finance departments initially proposed denying the waiver, as the tender document had no provision for it. However, the Minister in charge, Manish Sisodia, approved the waiver, citing similar relief given to hotels, clubs, and restaurants during Covid. This led to a loss of ₹144 crore.
The report also mentioned a ₹27 crore loss due to errors in collecting security deposits from licensees.
It further stated that a group of ministers (GoM), led by Manish Sisodia, changed the expert committee’s recommendations. Instead of following the committee’s advice, the GoM allowed private parties to handle wholesale liquor operations, introduced one-time bidding instead of a lottery for allocating vends, and increased the number of vends an individual could own from two to 54.
Some decisions with financial impact were made without Cabinet approval or the Lieutenant Governor’s opinion. These included relaxing penalties for defaulters, waiving license fees, refunding earnest money for the airport zone, and modifying the formula for liquor pricing.
The CAG report concluded that weak policy and poor implementation resulted in losses of about ₹2,002.68 crore.
With inputs from agencies