CAG Report Presented in Delhi Assembly: AAP Government’s Excise Policy Led to Over ₹2,000 Crore Revenue Loss
New Delhi: Delhi Chief Minister Rekha Gupta presented the Comptroller and Auditor General (CAG) report in the Delhi Assembly on Tuesday. The report highlighted that the previous Aam Aadmi Party (AAP) government’s excise policy resulted in a revenue loss exceeding ₹2,000 crore.
According to the CAG report, Delhi’s 2021-22 excise policy had multiple flaws, leading to a massive financial setback of ₹2,026.91 crore. The report sheds light on alleged financial irregularities during the previous AAP government, particularly in the Delhi Excise Liquor Policy. It covers the regulation and supply of India-Made Foreign Liquor (IMFL) and foreign liquor in Delhi over a four-year period from 2017-18 to 2021-22.
The audit findings for the 2017-21 period include:
Violations in granting liquor licenses
Lack of transparency in IMFL pricing
Inadequate control over liquor quality
Weak regulatory mechanisms for detecting revenue leaks and preventing liquor smuggling
Lack of strict evidence collection and verification in cases of violations under the Delhi Excise Act and rules
The report also exposes flaws in the New Excise Policy (2021-22), such as:
Ignoring the recommendations of the expert committee formed to suggest changes
Granting wholesale liquor licenses to private entities instead of a state-owned wholesale unit
Charging excise duty in advance as part of the license fee instead of per bottle
Allowing a single applicant to obtain up to 54 retail liquor shops, whereas previously, an individual could get a maximum of only two shops
The total financial impact of these audit findings amounts to approximately ₹2,026.91 crore.
The report further states that Manish Sisodia, the then Deputy Chief Minister and Excise Minister, disregarded the recommendations of the expert panel formed for modifying the now-defunct excise policy.
Additionally, the Excise Department suffered a loss of ₹890.15 crore due to its failure in re-tendering liquor zones after license surrenders. The CAG report also highlights an irregular ₹144 crore relief granted to license holders citing COVID-19 restrictions, which was personally approved by Manish Sisodia despite objections from the Finance Department.