Delhi Liquorgate: CAG Report Exposes Rs 2,002 Cr Loss and Policy Failures
A new Comptroller and Auditor General (CAG) report tabled in the Delhi Assembly has revealed that former Chief Minister Arvind Kejriwal and his ministers caused a massive financial loss of over Rs 2,002 crore through their controversial excise policy, known as "Liquorgate."
New Delhi: A new Comptroller and Auditor General (CAG) report tabled in the Delhi Assembly has revealed that former Chief Minister Arvind Kejriwal and his ministers caused a massive financial loss of over Rs 2,002 crore through their controversial excise policy, known as “Liquorgate.”
Table of Contents
Sub-Optimal Implementation and Non-Achievement of Policy Objectives
The CAG report, titled “Report of the Comptroller and Auditor General of India on Performance Audit on Regulation and Supply of Liquor in Delhi,” highlighted that the policy failed to meet its key objectives, including generating optimum revenue, eradicating the sale of spurious liquor, simplifying the excise regime, and ensuring equitable distribution of retail vends. The document pointed out illegal decision-making aimed at benefiting select licensees, with many vends failing to open in non-conforming areas and retail distribution being far from fair.
Irregularities in Decision-Making and Policy Relaxations
The report criticized the AAP government for making decisions without the necessary approvals, including opening liquor vends in areas such as residential zones, places of worship, and near schools. It also highlighted the government’s failure to take coercive actions against licensees who defaulted on payments, along with issues such as waivers in license fees, refunding earnest money deposits, and altering the formula for calculating the MRP of foreign liquor.
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Serious Lapses and Mismanagement in Policy Execution
Among the most glaring failures, the CAG report noted that the AAP government deviated from the recommendations of an expert committee when drafting the new excise policy. The report revealed that one applicant was allowed to secure up to 54 retail vends, despite the expert committee’s suggestion that individuals be allotted no more than two. Additionally, the provision in the excise policy allowing retail licensees to offer discounts was flagged for creating further irregularities.
Health Risks and Lack of Quality Control
A major concern raised by the CAG was the failure to set up laboratories to check the quality of liquor being supplied in Delhi. This lapse posed significant health risks to millions of residents. The report also detailed a lack of scrutiny of business entities, which resulted in related companies controlling licenses across the entire liquor supply chain.
Revenue Losses and Irregularities in Licensing
The CAG estimated a loss of approximately Rs 890 crore due to the government’s failure to re-tender surrendered retail liquor licenses. Furthermore, the report revealed that the government lost an additional Rs 941 crore because of exemptions granted to zonal licensees, contributing to massive revenue losses.
