The Comptroller and Auditor General (CAG) report, presented in the Delhi Assembly on Tuesday, disclosed that errors in the 2021-22 liquor policy during the Aam Aadmi Party (AAP) government resulted in financial losses of over Rs 2,000 crore. The report quoted revenue losses, irregularities in licenses, and violations of zoning, blaming former Deputy Chief Minister and Excise Minister Manish Sisodia for ignoring expert advice.
Major Revenue Losses Due to Licensing Failures
The CAG report had put the revenue loss at Rs 941.53 crore on account of the delay in receiving permissions for opening liquor vends in non-conforming municipal wards—those zones not approved for liquor sale under zoning regulations. This took a heavy toll on the Delhi government’s revenues.
Besides, the Excise Department lost Rs 890.15 crore when 19 zonal licensees handed over their licenses. The department did not re-tender these liquor zones and, as a result, earned no revenue from these zones at all.
Irregular Waiver of Rs 144 Crore in Licence Fees
The report also raised a red flag against an irregular waiver of Rs 144 crore allowed to liquor licensees given COVID-19 restrictions. Sisodia approved this waiver himself despite the objection from the finance department.
“Despite being mentioned in the conditions of tender document that any commercial risk shall lie with the licensee, clarification provided during the pre-bid meeting that there is no provision for force majeure and against the opinion of the excise department to relax the license fees, a waiver of license fees of ₹144 crore was granted to the zonal licenses on the basis of COVID restrictions (December 28, 2021 to Janaury 27, 2022) resulting in loss of revenue to the government,” reads the report.
Policy Transgressions and Implementation Failures
The CAG report laid bare some important violations in implementing the liquor policy:
The Delhi Master Plan 2021 banned liquor vends in non-conforming zones, but the Excise Policy 2021-22 had specified a minimum of two retail vends per ward.
Even though there were apparent zoning rules, licences were issued prior to resolving these issues.
On 16th November 2021, the Delhi Development Authority (DDA) prohibited liquor vends in non-conforming areas, which resulted in a court case when licence holders were finally exempted from paying Rs 114.50 crore each month in licence fees.
Political Fallout and BJP’s Allegations
The Bharatiya Janata Party (BJP) has also long accused the AAP government of corruption and mismanagement in the liquor policy. The report shed light on how the Group of Ministers (GoM), headed by Sisodia, made changes to expert committee suggestions in favor of private wholesalers and from 2 to 54 retail outlets per bidder. Key financial decisions were also made without Cabinet or LG approval.
CBI Investigation and AAP Leader Arrests
In July 2022, Delhi Lieutenant Governor VK Saxena proposed a CBI probe in response to the controversial policy’s aftermath. Many AAP leaders, including Arvind Kejriwal, Manish Sisodia, and Sanjay Singh, were arrested as a result, and they spent months behind bars.
The BJP has employed the liquor policy scandal as a major issue against AAP, accusing it of financial mismanagement and corruption of public funds. With the CAG report now out in the open, the scandal is likely to heighten political confrontations in Delhi.
