Breakdown of ₹2,026 crore loss
The key components of the loss are as follows:
- While some retailers retained their licenses for the entire policy period, others surrendered them prematurely. The government failed to re-tender these surrendered retail licenses, leading to an estimated loss of ₹890 crore.
- Exemptions granted to zonal licensees accounted for a revenue shortfall of ₹941 crore.
- The government waived license fees totaling ₹144 crore for zonal licensees, citing COVID-19 restrictions. However, the tender document explicitly stated that commercial risks were to be borne by the licensees, and there was no provision for a force majeure clause.
- Procedural lapses in collecting security deposits resulted in an additional revenue loss of ₹27 crore.
CAG report claims ‘lapses’ in Excise Policy
The report claimed sub-optimal policy execution, financial mismanagement, and there seem to be procedural violations, with several entities granted licenses despite red flags regarding their financial health.
The CAG report reveals several key findings, including that expert panel recommendations were ignored by the GoM led by Manish Sisodia. All entities were allowed to bid despite complaints, and the financial condition of bidders was not red-flagged before issuing licenses.
In fact, one entity showed a loss, yet its license was renewed. There were violations in the issuance of licenses, and violators were deliberately not penalised. The report also highlights a lack of transparency in pricing, and that Cabinet or LG approval was not sought on many key decisions. Additionally, excise rules, which should have been placed before the legislative assembly for ratification, were not.
Other Major Lapses
- Objectives of the policy could not be achieved due to poor execution.
- Entities’ financial and managerial capabilities were not thoroughly assessed.
- Liquor supply data revealed exclusivity arrangements between zonal licensees and wholesalers.
- Planned initiatives, including the setup of labs and batch-testing facilities for quality assurance, were not executed.
- The policy failed to ensure an equitable distribution of retail outlets.
The CAG has urged the government to fix responsibility for these lapses. While investigations are ongoing, the findings have intensified public scrutiny of the AAP government.
As Delhi heads toward another election cycle, taxpayers are left questioning whether accountability will be ensured for the staggering revenue loss.
