Trouble mounts for Kejriwal as CAG report on liquor policy says Delhi govt had losses of Rs 2,000 crore

Rekha Gupta tabling the CAG report in Assembly.

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.

The report further mentions that ineligible e firms were allowed to participate in the tendering process (In what is now withdrawn Delhi Excise Policy)  and previous AAP government did not provide any file for auditing.

The report, one of 14 on the previous Aam Aadmi Party government’s performance to be tabled by the new Rekha Gupta-led dispensation, has also flagged violations in the process of issuing licences. It has 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.

The second day of the three-day assembly session began with chaos, as within minutes of commencement, several AAP MLAs, including LoP Atishi, got suspended for their sloganeering against the photo replacing row in the CM's office.

The report on the alleged liquor scam, a hot button issue in the run-up to the elections, claimed a loss of revenue to the tune of Rs 941.53 crore, saying timely permissions were not taken for opening the liquor vends in “non-conforming municipal wards”.

Non-conforming areas are areas which do not conform to land use norms for opening of liquor vends. "The excise department suffered a loss of approximately Rs 890.15 crore on account of license fee from these zones owing to their surrender and failure of the department in re-tendering," the report, tabled by the chief minister, added.

Besides, there was loss of revenue to the tune of Rs 144 crore due to "irregular grant" of waiver to the licensees because of Covid pandemic related closure, the report said.

The alleged irregularities in the formulation and implementation of the policy had snowballed into a political punching bag used by the BJP after Lt Governor V K Saxena recommended a CBI probe in July 2022. Top leaders of AAP, including Arvind Kejriwal, Sisodia and Sanjay Singh, have spent months in jail after probe agencies arrested them in the case

"The excise department did not take timely action to work out modalities for proposed vends in non-conforming areas and the initial tender was floated on June 28, 2021 without taking comments from the DDA and MCD,” it said.

Licences were allotted in August 2021 even before this issue was sorted out and the vends were scheduled to start operations from November 17, 2021. Meanwhile, the Delhi Development Authority (DDA) issued an order on November 16, 2021, disallowing vends in non-conforming areas, it said.

The licensees then approached the high court. On December 9, 2021 , the court exempted them from paying any licence fee in respect of mandatory vends in 67 non-conforming wards. This resulted in the exemption of licence fee of Rs 114.50 crore per month.

"Non-sorting of this issue before notice inviting tender (NIT), resulted in this exemption and a cumulative loss of nearly Rs 941.53 crore," said the CAG report. The report pointed out that 19 zonal licensees had surrendered their licences before the policy expired in August 2022 — four in March 2022, five in May 2022 and 10 in July 2022.

The BJP has been alleging that the reports were withheld by the AAP administration.