CAG Highlights Flaws In ‘New Excise Policy’ Of Previous Delhi Govt; Detects ₹2,000 Cr Loss

New Delhi: The Comptroller and Auditor General (CAG)’s report, tabled in the Delhi Assembly on Tuesday, stated that the ‘New Excise Policy’ of the previous government led to revenue loss of Rs 2,000.68 crore. This was primarily due to the non-opening of shops, non-retendering, fee waivers, and security deposit failures.

The audit watchdog has pointed to licence violations. Wholesalers with ties to manufacturers and retailers were apparently granted licences. This was in violation of excise rules. Wholesale margins were increased from 5% to 12% for quality checks, though no laboratories were set up.

“Licenses were awarded without financial, solvency, or criminal checks, allowing proxy ownership and favouritism. The government even disregarded the recommendations of its own committee while implementing the 2021-22 Excise Policy,” the report states.

According to it, single entities were allowed to operate up to 54 vends. The CAG discovered that 22 firms controlled 849 vends, thereby bringing down competition and resulting in revenue drop. It has also been ascertained that three wholesalers dominated 71% of the liquor supply to the state. This resulted in price rise while limiting the choice for customers.

The CAG has claimed that approvals were not sought from the Cabinet or the Lieutenant-Governor before making major policy changes. Liquor vends were opened in residential areas without necessary approval from the Municipal Corporation of Delhi (MCD) or Delhi Development Authority (DDA). Some plots were falsely declared as commercial.

The L1 licensees allegedly set liquor prices arbitrarily, inflating rates. Licences were also issued without proper quality checks. Some reports are from non-accredited laboratories. The Excise Intelligence Bureau failed to curb liquor smuggling despite repeated patterns.

Weak record-keeping enabled revenue loss and promoted illegal liquor trade. Excise law breaches went unpunished due to weak enforcement and poor documentation. There was no implementation of security labels and outdated tracking methods were used, it added.