Delhi Excise Policy: CAG report alleges Rs 2,026 crore loss, flags major lapses

The CAG found that many key decisions were taken arbitrarily without obtaining approval from the cabinet or the Delhi Lieutenant Governor (LG).

The Comptroller and Auditor General (CAG) has flagged major lapses in the now-scrapped excise policy of the Delhi government, alleging a loss of Rs 2,026 crore to the exchequer, according to a report by News18. This is the first time the financial impact of the alleged liquor scam has been quantified.

The report claimed that several bidders operating at a loss were still granted licenses under the Arvind Kejriwal-led government. News18 highlighted that the policy implementation resulted in a significant revenue loss, with the common public bearing the brunt while certain AAP leaders allegedly received “kickbacks.”

The report further pointed fingers at Manish Sisodia, who headed the excise department at the time, and a group of ministers, accusing them of ignoring the recommendations of an expert panel. It also claimed that licenses were issued despite clear violations and that the violators were deliberately not penalized.

The CAG found that many key decisions were taken arbitrarily without obtaining approval from the cabinet or the Delhi Lieutenant Governor (LG).

Key Findings from the CAG Report

• Expert panel recommendations were ignored by the group of ministers led by Manish Sisodia.
• All entities, including those with complaints, were allowed to bid.
• The financial condition of bidders was not scrutinized before issuing licenses.
• Licenses were renewed for entities operating at a loss.
• Violations in license issuance were deliberately overlooked.
• A lack of transparency in pricing decisions.
• Several key decisions were made without cabinet or LG approval.
• Excise rules were not placed before the legislative assembly for ratification.
• Breakdown of the Rs 2,026 Crore Loss

• Rs 890 crore loss: Retailers surrendered their licenses before the policy expired, and the government did not re-tender them.
• Rs 941 crore loss: Exemptions granted to zonal licensees led to significant revenue loss.
• Rs 144 crore loss: License fees were waived during COVID-19 restrictions, despite the tender agreement explicitly stating no provision for force majeure.
• Rs 27 crore loss: Errors in collecting security deposits.