Delhi’s Leader of Opposition and Aam Aadmi Party (AAP) leader Atishi on Tuesday defended the previous Arvind Kejriwal-led government, asserting that the Comptroller and Auditor General (CAG) report on Delhi’s excise policy has validated AAP’s stance. She claimed that the report highlighted flaws in the old excise policy, which the AAP government had previously exposed before implementing a new policy.
Addressing a press conference, Atishi said, “The excise audit report was presented in the Delhi Assembly today. Its seven chapters are on the excise policy from 2017-21, and one chapter is on the new excise policy. The Delhi government had exposed the flaws and corruption of the old excise policy to the people of Delhi.”
She further alleged that liquor was being illegally sourced from Uttar Pradesh and Haryana under the previous policy, causing financial losses to Delhi. “Under that policy, liquor was brought illegally from Haryana and UP... This report is repeating the same thing that we said—that the people of Delhi are incurring losses due to the old policy... This policy makes it clear that the AAP government took the right decision by removing the old policy,” she added.
Atishi also claimed that the report confirmed corruption in the liquor trade. “This report has confirmed our point. There was corruption in how much liquor was being sold. This report shows that more than 28 per cent of corruption was being done by the contractors, and the money was going into the pockets of the brokers. This report shows that black marketing of liquor was happening, and everyone knew which party people had the liquor contracts. The liquor contractors made profits by calculating the cost price in an incorrect manner,” she alleged.
“This CAG report is repeating what the AAP government was saying all the time. Smuggling of liquor was being done from UP and Haryana. We all know whose government is there in these states and who must be getting the profit,” the former Delhi chief minister remarked in a veiled attack on the BJP.
Atishi claimed that the CAG report showed the new excise policy had “increased transparency, ways to curb black-marketing sales and smuggling, and boosting the revenue of the Delhi government”. She credited the AAP government's excise policy for a “65% increase” in the Punjab government's revenue as the policy continues to be implemented in the state.
CAG Report Tabled In Delhi Assembly Session
The Bharatiya Janata Party (BJP) government in Delhi, led by Chief Minister Rekha Gupta, tabled the CAG report on the Delhi Excise Policy in the Assembly. The ‘Performance Audit on Regulation and Supply of Liquor in Delhi’ covers the period from 2017-18 to 2020-21 and scrutinises the regulation and supply of Indian Made Foreign Liquor (IMFL) and Foreign Liquor in the national capital.
According to the report, the Delhi government suffered cumulative losses exceeding ₹2,000 crore due to the 2021-22 excise policy. The audit observed discrepancies in how the Excise Department monitored liquor supply, raising questions about its functioning. The total financial implication of the audit findings is approximately ₹2,026.91 crore, the report stated.
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CAG Report Flags Risk of Monopolies and Brand Pushing
The CAG report also highlighted that the 2021-22 excise policy created risks of monopolies and brand pushing through exclusive arrangements between a few wholesalers and manufacturers, news agency PTI reported. According to the report, three distributors controlled over 71 per cent of Delhi’s liquor supply chain.
Of the 367 registered IMFL brands, 25 brands accounted for nearly 70 per cent of total liquor sales in Delhi. The report pointed out that the exclusivity arrangement allowed a single wholesaler to control the supply of all brands from a particular manufacturer. It noted that while 367 IMFL brands were registered, only a few popular brands dominated sales.
The report, which is one of 14 audits on the previous AAP government’s performance, revealed that the top 10 brands accounted for 46.46 per cent of total liquor sales, while the top 25 brands made up 69.50 per cent of total sales. Among them, Brindco and Mahadev Liquor exclusively supplied seven brands each, while Indospirit controlled six brands.
Furthermore, among the 367 IMFL brands supplied by 13 wholesale licensees, Indospirit exclusively supplied the highest number (76 brands), followed by Mahadev Liquors (71 brands) and Brindco (45 brands). These three wholesalers collectively accounted for 71.70 per cent of the liquor volume sold in Delhi.
The report flagged the 2021-22 policy for having inherent design flaws, including exclusivity between manufacturers and wholesalers, and the creation of retail zones covering a minimum of 27 wards each. This, the report noted, resulted in fewer total licensees and increased risks of monopolisation and cartel formation, PTI reported.
It was observed that wholesale licences for IMFL and Foreign Liquor (FL) supply were granted to only 14 business entities, compared to 77 manufacturers of IMFL and 24 suppliers of FL under the previous 2020-21 policy. Similarly, while 32 retail zones (containing 849 vends) were created in the new policy, with licences granted to just 22 entities, the earlier system had 377 retail vends run by four government corporations and 262 allotted to private individuals, as per PTI.
According to the CAG report, the Group of Ministers, led by then Deputy Chief Minister Manish Sisodia, had mentioned in its report that the liquor retail market was allegedly controlled by a few individuals through a fraudulent proxy model. However, the panel still recommended distributing retail licences in zones where one entity could operate up to 54 vends (two zones).
The excise policy has been a contentious issue, with allegations of corruption and irregularities becoming a poll issue ahead of the recent Delhi election which saw the AAP lose power to the BJP.