New Delhi, Feb 25 (PTI) Delhi's previous AAP government launched the excise policy 2021-22 to massive controversy leading to its top leaders, including Arvind Kejriwal, being jailed. The policy was scrapped following a CBI enquiry recommended by Lt Governor V K Saxena in July 2022.

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Following are the highlights of the CAG report tabled in the Delhi Assembly on Tuesday:

1. Loss of Rs 2,002.68 crore excise revenue:

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Due to a number of issues ranging from weak policy framework to deficient implementation of the policy, there was cumulative loss of Rs 2,002.68 crore. This included issues related to opening of liquor vends in non-conforming municipal wards (Rs 941.53 crore), failure to re-tender, surrendered licences (Rs 890 crore), Covid-linked waiver to retail licensees (Rs 144 crore) and failure to properly collect security deposit (Rs 27 crore).

2. Violation of licence rules:

Wholesalers having manufacturing interests, and connection with retailers controlled supply of nearly one-third of the total liquor trade in Delhi, posing a risk of monopolies and brand pushing.

3. Wholesalers margin raised from earlier 5 per cent to 12 per cent:

The justification given by a group of ministers was that it was necessary to compensate the higher licence fee for global distribution standard, quality checking systems with setting up labs at warehouses and also supposedly covering cost of local transport.

4. Retail liquor licences:

Retail liquor licences were given without proper checks and verification of solvency, financial statements and criminal background. No qualification criteria despite a zonal license (27 vends) required Rs 100 crore investment.

5. Expert committee recommendations:

The recommendations of the expert committee that drafted the policy was changed by the group of ministers (GoM) headed by then deputy chief minister Manish Sisodia. The expert committee recommended liquor wholesale to be handled by a government agency, but GoM recommended wholesale to be handled by private entities.

6. Monopoly in retail trade of liquor:

The policy aimed at disrupting monopoly in retail trade of liquor in Delhi. However, it in fact posed risk of monopolies and brand pushing. Only three private wholesaler controlled 71 per cent supply of IMFL and foreign liquor in the city. Also, just 22 private entities were given license to run 849 liquor vends dispersed over 32 zones.

7. Revenue implications:

Key decisions with revenue implications were taken without having approval of the Cabinet and opinion of the lieutenant governor. These included relaxation from coercive action against defaulter licensees, waiver in license fee, refund of earnest money deposit in case of airport zone, correction in formulae to calculate maximum retail price of foreign liquor.

8. Faulty quality compliance:

Excise department issued licenses to entities not having proper quality test reports or having those not compliant with Bureau of Indian Standards (BIS) norms. In 51 per cent foreign liquor test cases, reports were either missing or over one year old.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)