New Delhi: A report by the Comptroller and Auditor General (CAG) has revealed substantial irregularities in Delhi’s excise policy for the fiscal year 2021-22, which allegedly led to a revenue shortfall of Rs 2,002.68 crore. This report was submitted to the Delhi Assembly by the newly formed Bharatiya Janata Party government and critically examines the policy established by the previous administration, led by Aam Aadmi Party.
The audit indicates that the policy was implemented without the necessary approvals from either the cabinet or the Lieutenant Governor, thereby heightening the potential for monopolistic practices and cartel formation in the liquor industry. The findings also suggest that the policy allowed the government to provide undue advantages to specific stakeholders in both the wholesale and retail liquor markets by easing eligibility requirements.
Particularly concerning was the introduction of joint ventures, which permitted entities with limited experience to obtain wholesale licenses. In numerous cases, firms possessing the necessary expertise held only a minor stake—between one percent and five percent—while the majority partner, often lacking relevant experience, controlled the joint venture.
Moreover, the CAG report points out that the standards for determining the relationship between wholesalers and retailers were significantly relaxed. This created a loophole that enabled connections between different entities, resulting in conflicts of interest that compromised the integrity of the licensing system. Additionally, a contentious decision to increase distributor profit margins from five percent to 12 percent was identified as a potential avenue for generating kickbacks.
These irregularities have prompted investigations by the Enforcement Directorate and the Central Bureau of Investigation (CBI), resulting in the detention of prominent individuals, including former Delhi chief minister Arvind Kejriwal, former deputy chief minister Manish Sisodia, and AAP MP Sanjay Singh, all of whom are currently out on bail.
Watch ThePrint Editor-in-Chief Shekhar Gupta, Assistant Editor Sourav Roy Barman and Senior Associate Editor Ananya Bhardwaj break down the report and its implications in Episode 1613 of #CutTheClutter.
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