Understanding Delhi’s Liquor Policy

The policy was proposed in 2020 and was implemented in November 2021.

• The city of Delhi was partitioned into 32 zones with each zone consisting of 27 liquor vends.
• The primary objective of this policy was to eradicate the liquor mafia and black marketing, augment revenue, enhance the consumer experience, and ensure a fair distribution of liquor vends across the city.
• With this policy, the government stopped selling liquor, paving the way for private liquor shops to operate in the city. Each municipal ward was allowed to have 2-3 vends.
• The policy also liberalized the rules for licensees. They were permitted to offer discounts and set their own prices, moving away from the government-fixed MRP.
• The discounts offered by vendors attracted a large number of customers. However, following opposition protests, the excise department temporarily suspended the discounts.
• Following the implementation of the new excise policy for 2021-22, the government's revenue saw an increase of 27 per cent, generating around Rs 8,900 crore.

The Current Scenario:

• CBI’s Action on Delhi's Excise Policy: The CBI filed an FIR naming 15 individuals in connection with the Delhi excise policy for 2021-2022, with Sisodia being the primary accused.
• The FIR alleged that certain L-1 licence holders were issuing credit notes to retail vendors with the intention of diverting funds for undue pecuniary advantage to public servants, thereby creating false entries in their books of accounts.

How did the Delhi Police EOW (Economic Offences Wing) get involved?

• The revised liquor policy proposed several changes to the existing policy such as home delivery of liquor, extension of shop timings till 3 am, and allowing licensees to offer unlimited discounts. These changes were proposed by a group of ministers in the Delhi cabinet on May 2, 2022.
• Before the implementation of the policy, the Chief Secretary reviewed it and flagged "procedural lapses" and irregularities. These concerns were raised in a report to Sisodia, who heads the excise department.
• The Chief Secretary also informed the EOW about the alleged illegalities, cartelisation, and monopolies in the liquor trade, and asked it to investigate. This is how the EOW came into the picture.

The Highlights of the Chief Secretary’s Report:

• The report submitted to the L-G and CM alleged that Sisodia made changes to the excise policy without the approval of the L-G, such as allowing a waiver of Rs 144.36 crore on the tendered licence fee.
• It was noted that any changes to an already implemented policy need to be placed before the cabinet and forwarded to the L-G for final approval. Any changes made without the approval of the cabinet and L-G are illegal, and in violation of the Delhi Excise Rules, 2010 and the Transaction of Business Rules, 1993.
• The report also alleged that Sisodia gave undue benefits to liquor licensees by revising the rates of foreign liquor and removing the levy of an import pass fee of Rs 50 per case of beer. This move, according to the report, led to a loss of revenue for the state exchequer as foreign liquor and beer became cheaper for retail.