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Explained: What is the controversy surrounding Delhi government’s liquor policy?

Delhi government liquor policy controversy explained: The Delhi Police’s Economic Offences Wing is probing alleged irregularities in its new liquor policy.

Delhi liquor policy, Delhi excise policy, Manish Sisodia raid, Sisodia CBI raid, Manish Sisodia, Delhi news, Indian ExpressA notice mentioning the closure of a private liquor shop put up inside the shop's premises, in New Delhi, Saturday, July 30, 2022. (PTI Photo)

Deputy Chief Minister Manish Sisodia announced on Saturday (July 30), that the Delhi government’s ambitious new liquor policy (Delhi Excise Policy 2021-22) will be scrapped entirely and that from August 1, only government owned liquor vendors will be allowed to sell alcohol in the national capital.

This development comes amidst the recently launched probe into the Delhi government’s excise department by the Delhi Police’s Economic Offences Wing (EOW), due to alleged irregularities in its new liquor policy.

Last week, the Lieutenant Governor of Delhi, Vinai Kumar Saxena, also recommended a CBI probe into the policy and directed Delhi’s Chief Secretary to submit a report detailing the “role of officers and civil servants in its illegal formulation, amendments and implementation.”

How did Delhi Police’s EOW get involved in the matter?

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The Delhi government’s revised policy, which proposed changes like home delivery of liquor, the opening of shops till 3 am and allowing licensees to offer unlimited discounts, was proposed by the group of ministers in the cabinet on May 2.

Before its implementation, the policy had to first be examined by the Chief Secretary (CS) of Delhi, Naresh Kumar, who was appointed in April this year. After receiving the proposal from the excise department, the CS had found “procedural lapses” and irregularities in the Delhi Excise Policy 2021-22. On July 8, he sent a report to Sisodia, who heads the excise department and asked for a reply. The report was also sent to Delhi’s Chief Minister Arvind Kejriwal and LG Vinai Kumar Saxena on the same day.

Sources told the Indian Express that after expressing concerns with the policy, the CS also informed the Delhi Police’s EOW about alleged illegalities, cartelisation and monopolies taking place in the liquor trade, and asked them to investigate the matter. The EOW subsequently collected digital video recordings (DVRs) of excise department meetings held over 15 days this month, including one that reportedly went on till 5 am on the night of July 11-12.

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What information has the EOW asked for?

Delhi Police’s EOW issued a notice to the assistant commissioner of the Delhi Excise Department, seeking details about the alleged illegal distribution of liquor licences to companies that had violated the terms and conditions of New Excise Policy 2021-22.

It has sought documents and details from the excise department urgently, such as the date that the New Delhi Excise Policy 2021-22 was formulated, and when the tenders for the grant of liquor licences under the new policy were floated.

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The EOW has also asked the department to provide the application forms of all successful applicants that received a liquor licence, along with other relevant documents that they had to submit. Additionally, it has asked the excise department to outline the procedure it followed to curb the monopolisation and cartelisation of the liquor trade.

What did the Chief Secretary’s report say?

According to the report submitted to the LG and CM of Delhi, Sisodia allegedly made changes to the excise policy without the approval of the LG, such as allowing a waiver of Rs. 144.36 Crores on tendered licence fee on account of the COVID-19 pandemic.

It also states that Sisodia gave undue benefits to liquor licensees by revising the rates of foreign liquor and removing the levy of import pass fee of ₹50 per case of beer. This, according to the report, made foreign liquor and beer cheaper for retail, leading to a loss of revenue for the state exchequer.

Officials said that if any changes are made to a policy that has already been implemented, the excise department needs to place them before the cabinet and forward it to LG for final approval. Any changes that are made without the approval of cabinet and LG are illegal and in violation of the Delhi Excise Rules, 2010 and the Transaction of Business Rules, 1993.

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What is Delhi’s liquor policy?

Proposed in 2020, it came into effect in November 2021. Delhi was divided into 32 zones with each zone having 27 liquor vends. It also marked the exit of the government from selling liquor — only private liquor shops now run in the city and each municipal ward has 2-3 vends. It aimed to end the liquor mafia and black marketing, increase revenue and improve consumer experience, and ensure equitable distribution of liquor vends. The government also made rules flexible for licensees such as allowing them to offer discounts and set their own prices instead of selling on MRP fixed by the government. Following this, discounts were offered by vendors, which attracted crowds. After protests by the opposition, the excise department withdrew discounts for some time.

After the implementation of Excise policy 2021-22, the government’s revenue increased by 27 percent, generating around Rs 8900 crore.

First published on: 30-07-2022 at 10:41:14 pm
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