Rs 2,002-Crore Loss To Delhi Authorities Due To Liquor Coverage: CAG Report

New Delhi:

Pointing to a string of flawed selections and omissions, a report by the Comptroller and Auditor Basic (CAG) tabled within the Delhi Meeting on Tuesday states that the scrapped liquor coverage which was applied in November 2021 and scrapped in September the subsequent 12 months brought on a lack of Rs 2,002.68 crore to the Delhi authorities. 

The liquor coverage was an albatross across the neck of the earlier AAP authorities and had led to a number of of its leaders, together with then chief minister Arvind Kejriwal and deputy chief minister Manish Sisodia, touchdown behind bars. The corruption allegations surrounding the coverage are additionally seen as having performed a key position within the AAP being defeated on this month’s Meeting elections and the BJP forming a authorities in Delhi after a niche of 26 years. 

The report, which was tabled amid an enormous uproar within the Meeting – which additionally noticed 15 AAP MLAs being suspended – divides the losses into numerous subheads. It states that the most important chunk of the loss, Rs 941.53 crore, was as a result of liquor retailers weren’t allowed to open in non-conforming areas – these that don’t conform to land use norms for opening liquor vends – beneath the brand new coverage. 

The following large loss quantity of Rs 890.15 crore was due to tenders not being issued for 19 zones the place licences had been surrendered. “Consequently, no excise income accrued as licence price from these zones within the months after give up. Notably, no different contingent association was put in place to proceed liquor retail in these zones,” the report states.

The report additionally mentioned {that a} lack of income of Rs 144 was brought on due to charges being waived to licensees within the identify of Covid-19 and Rs 27 crore due to the “incorrect assortment” of safety deposit from zonal licensees. The figures beneath these 4 subheads add as much as Rs 2,002.68 crore.

Violations

Flagging different violations, the CAG report states that the Delhi Excise division didn’t guarantee correct implementation of Rule 35 of the Delhi Excise Guidelines, 2010, which prohibits the issuance of a number of licences of various classes – wholesaler, retailer, HCR (resort, golf equipment and eating places – to associated events. This, sources mentioned, benefited sure individuals.

One of many key contentions of these opposing the liquor coverage was that the wholesaler margin had been elevated from 5% to 12%. The Enforcement Directorate had additionally mentioned that half of this 12% was to be recovered from wholesalers as kickbacks for AAP leaders. The report mentioned that the justification provided for climbing the margin was that licensees needed to arrange a government-approved laboratory at their warehouses to randomly test for sub-standard or spurious liquor in every batch obtained from the producers and to cowl the price of native transportation.

It states that the native transportation cost “was not sufficient to justify the substantial improve in distributor margin” and the standard checking labs “which have been to be arrange, with apparently excessive price incidence, weren’t put in place and operationalised.”

This, sources mentioned, promoted monopolisation and cartelisation.

Three wholesalers additionally accounted for over 70% of the liquor bought in Delhi. “Additional, of the 367 manufacturers of IMFL provided by 13 Wholesale licensees, the best variety of manufacturers have been solely provided by Indospirit (76 manufacturers), adopted by Mahadev Liquors (71 manufacturers) and Brindco (45 manufacturers). These three wholesalers additionally accounted for 71.70 per cent of quantity of liquor bought in Delhi,” the report says. 

Authorities vs Personal

One other key discovering of the report was that the 4 highest-selling whiskey manufacturers in Delhi have been bought much less at authorities retailers and extra at non-public ones, leading to a lack of income for the Delhi authorities.

Solely 9.25% of the gross sales of Royal Stag Reserve/Premier whiskey, for example, have been at authorities liquor retailers, whereas non-public vends accounted for the remaining 90.75%. At 22.04% in authorities retailers, the quantity was a lot better for Officer’s Alternative Blue whiskey however stood at simply 2.26% for “MCD No 1” whiskey, which probably stands for McDowell’s No 1.