The report talks about pricing of liquor left at the discretion of manufacturer and wholesalers instead of government.
NEW DELHI: A CAG report, evaluating performance of Delhi government’s regulation and supply of liquor in the national capital between 2017-18 and 2020-21, has observed several irregularities in excise policy and its implementation, similar to the findings of probe carried out by CBI and ED. CAG has thus estimated a loss of Rs 2,027 crore to the exchequer.
The report was signed by former CAG GC Murmu in March 2024 and sent to LG and Delhi government. But, it has not been tabled by state government. Sources have confirmed the report’s authenticity. CAG pointed out many violations, from award of licenses to wholesalers to appointing retailers and lack of monitoring and distribution of liquors.
The report talks about pricing of liquor left at the discretion of manufacturer and wholesalers instead of government. “This discretion allowed L1 licensee (manufacturer and wholesaler) to manipulate prices of liquor to its own advantage,” the CAG has said. This led to decline in sales and loss to exchequer. There was no quality control monitoring either in the liquor sold in Delhi.
Instead of end-to-end tracking for liquor sale through bar code scanning, the excise department went for post-sale stock reconciliation, undermining inventory tracking and data accuracy. ED and CBI had alleged payoffs of Rs 1,000 crore.
The auditor has blamed AAP government and party’s top functionaries in ignoring the Cabinet in formulating the new excise policy. “In violation of Cabinet decision, necessary permissions from the Cabinet/opinion of Lieutenant Governor were not obtained before giving important exemptions/relaxations having revenue implications (in new excise policy for 2021-22),” CAG has said.
CAG further pointed out that the “recommendations of the expert committee, formed for suggesting changes for formation of new excise policy, were ignored. These changes included grant of wholesale license to private entities instead of state owned wholesale entity, upfront charging of excise duty in the license fees in place of excise duty to be charged per bottle, applicant being allowed to get a maximum of 54 retail vends in place of an individual being allotted a maximum of two vends.”
CAG: Recommendations of expert panel ignored
It dramatically surfaced in political circles on Saturday, leading BJP to launch a ferocious attack on AAP. Approached by TOI, sources in the government confirmed its authenticity.
The report talks about the pricing of liquor left at the discretion of the manufacturer and wholesalers instead of the government, something which was the focus of CBI’s investigation. “This discretion allowed L1 licencee (manufacturer and wholesaler) to manipulate prices of liquor to its own advantage,” CAG has said. This led to a decline in sales and loss to exchequer, the report says, adding that there was no monitoring of quality control either of the liquor sold in the capital.
Instead of end-to-end tracking for liquor sale through bar code scanning, the excise department went for post-sale stock reconciliation, undermining inventory tracking and data accuracy, according to the report.
The audit also looked into the records of the new excise policy for 2021-22. While ED and CBI in their probe had alleged payoffs of Rs 1,000 crore, CAG in its findings, after evaluation of excise department documents, has claimed the irregularities resulted in a total loss of Rs 2,027 crore.
“There was revenue loss of Rs 890 crore to the government as it did not re-tender the surrendered retail licences,” the report has said, in addition to the loss of Rs 941 crore due to exemptions given to zonal licencees.
The federal auditor has said that the AAP government overruled the excise department to give waiver of licence fees of Rs 144 crore to zonal licencees on the basis of Covid restrictions (28 Dec 2021 to 27 Jan 2022). A further Rs 27 crore loss was on account of incorrect collection of security deposit from zonal licencees, it said. “These implementation issues of the new policy led to a loss of revenue of approximately Rs 2,002 crore,” the auditor said.
The auditor has blamed the AAP government and its top functionaries in ignoring the cabinet in formulating the new excise policy. “In violation of the cabinet decision, necessary permissions from the cabinet/opinion of the lieutenant governor were not obtained before giving important exemptions/relaxations having revenue implications (in the new excise policy for 2021-22),” the auditor has said.
The CAG further pointed out that the “recommendations of the expert committee, formed for suggesting changes for formation of new excise policy, were ignored.
