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Why did Arvind Kejriwal government revert to the old Excise Policy in Delhi despite earning huge profits? Here is all you need to know

The now-scrapped liquor policy of the Delhi government was originally proposed in 2020. After coming into effect in November 2021, it changed the manner in which alcohol was sold in Delhi.

The home delivery of liquor will cease to exist in the National Capital from Sunday (July 31) onwards, following the expiry of the Delhi Excise Policy 2021-2022 [pdf].

The now-scrapped liquor policy of the Delhi government was originally proposed in 2020. After coming into effect in November 2021, it changed the manner in which alcohol was sold in Delhi.

Until then, only government-owned liquor vendors were permitted to sell alcohol. The Delhi Excise Policy 2021-2022 introduced private players in the market. The National Capital was divided into 32 zones and a total of 27 private vendors were to ply in each zone.

Every municipal ward had 2-3 liquor vendors operating in the area. The private liquor shops were allowed to attract crowds by offering discounts on the Maximum Retail Price (MRP). They could deliver liquor at home, and even keep shops open till 3 am in the morning.

The drastic policy change resulted in a 27% increase in government revenue to ₹8900 crores. At the same time, it marked the complete exit of the Delhi government from the liquor business.

Despite this ‘success story’, the Arvind Kejriwal-led government had to take a U-turn on its new excise policy. It decided to switch back to its old excise regime for retail liquor sales.

Reportedly, an official direction was issued on Friday (July 29) by Delhi’s Deputy Chief Minister Manish Sisodia. “…Vide which it has, inter-alia, been directed to revert to the old regime of excise policy for a period of six months till a fresh excise policy is in place…”, the order read.

Allegations of cartelisation mars implementation of Excise Policy 2021-2022

So why did the Delhi government discard its ambitious plans? While the objective of Excise Policy 2021-2022 was to end black marketing and the liquor mafia, the AAP government soon came under fire over allegations of corruption.

Naresh Kumar, who was appointed the Chief Secretary of Delhi in April 2022, found irregularities and procedural lapses in the new liquor policy. A copy of the Excise Policy 2021-2022 was sent to him for examination by the Excise Department.

The Chief Secretary prepared a report and sought the response of Delhi’s Deputy Chief Minister Manish Sisodia on July 8. It must be mentioned that Sisodia is also the head of the excise department.

The report blamed the Deputy CM for making changes to the excise policy without the authorisation of the Lieutenant Governor and providing ‘undue benefits’ to the liquor vendors.

Manish Sisodia reportedly waived off ₹144.36 crores on the license fee, to be paid by the private liquor vendors, under the garb of the Coronavirus pandemic. He also caused loss to the Excise Department and benefitted liquor licensees by waiving the import pass fee of ₹50 per beer case.

Delhi Police steps in

All these changes were made without the final approval of the Lieutenant Governor and thus considered illegal under the Delhi Excise Rules of 2010 and Transaction of Business Rules of 1993.

A copy of the Chief Secretary’s report was forwarded to Lieutenant Governor Vinai Kumar Saxena and the Delhi Chief Minister.  Following the revelations, LG Saxena recommended a probe into the matter.

The Economic Offences Wing (EOW) of the Delhi police was also apprised of the irregularities in Excise Policy 2021-2022 by Chief Secretary Naresh Kumar. The cops gathered video recordings of the Excise Department’s meetings that took place in the month of July.

They sought procedural details about the distribution of liquor licenses, besides application forms of liquor licensees who were approved under the Excise Policy 2021-2022.

Under fire from all quarters, the Arvind Kejriwal-led-Delhi government was forced to return to the old excise regime to skirt the public outcry for the time being.

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OpIndia Staff
OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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