EXPLAINED | How the controversy over the Delhi Liquor Policy unfolded
Here's the timeline of events and the subsequent actions surrounding the controversial Delhi Liquor Policy 2021-2022.
NEW DELHI: The Central Bureau of Investigation (CBI) raided the residence of Delhi deputy chief minister Manish Sisodia on Friday morning. The agency has named him and 14 others including liquor barons in its FIR. The CBI also conducted search operations at the residences of three other Aam Aadmi Party (AAP) members.
As of now, the CBI has raided around 31 locations over allegations of corruption in the implementation of the Delhi Excise Policy 2021-2022.
After the implementation of the new liquor policy in November 2021, the Delhi government exited the liquor trade entirely, shutting all government-run vends, and the sale of liquor was handed over exclusively to private players.
The Delhi government had said the policy would eliminate the liquor mafia, increase revenue for the government, and enhance the consumer experience.
But the chief secretary Naresh Kumar’s report released on July 8 this year claims otherwise. Reacting to the report which alleged financial irregularities, Lieutenant Governor VK Saxena ordered a CBI probe.
Six days later, on July 28, Manish Sisodia withdrew the new liquor policy and reverted to the older policy which permits government-owned shops to sell liquor.
Here is a timeline of events in this matter:
Manish Sisodia claims innocence
While dismissing the corruption allegations levelled against him on August 19, the day the CBI booked him, Manish Sisodia said, “CBI had come to our house. They are welcome. We (he and his party leaders) are extremely honest. We are building the future of millions of children.”
He added, “It is very unfortunate that those who do good work in our country are harassed in this manner. That is why our country has not yet become number 1 in the world.”
AAP chief and Delhi CM Arvind Kejriwal came out to defend Manish Sisodia and announced that he is the “best education minister of independent India.”
What were the changes made to Delhi’s existing liquor policy?
- The Delhi liquor policy was proposed in 2020 and implemented in November 2021.
- The liquor policy changed the manner in which alcohol was sold in Delhi. Until the policy was introduced, the liquor business was a state-controlled entity with no private players. Only government-owned liquor vendors were permitted to sell alcohol.
- Previously, four government corporations ran 475 of Delhi's total 864 liquor stores.
- Under the new policy, 849 liquor vends were awarded to private companies through open bidding.
- It was the new Delhi Excise Policy 2021-2022 that introduced private players into the market. Delhi was divided into 32 zones and a total of 27 private vendors were allowed to open liquor shops in each zone. This meant every municipal ward had 2-3 liquor vendors operating in the area.
- Further, the private liquor shops were allowed to offer discounts on the Maximum Retail Price (MRP) in order to attract consumers. They were allowed to deliver liquor at home, and even keep their shops open till 3 am.
- The Delhi government had said the policy would eliminate the liquor mafia, increase revenue for the government, and enhance the consumer experience. The government had also issued guidelines for the appearance of liquor shops.
- This policy change resulted in a 27 per cent increase in government revenue to Rs 8,900 crores and marked the complete exit of the Delhi government from the liquor business.
On July 8, 2022, Delhi chief secretary Naresh Kumar found irregularities and procedural lapses in the new liquor policy and sent a report to Lt Governor VK Saxena accusing Manish Sisodia of providing undue benefits to those holding liquor licenses. He alleged the benefits were extended in return for the money that was used by the AAP in the Punjab Assembly polls.
The report alleged breaches of the Government of National Capital Territory of Delhi (GNCTD) Act of 1991, the Transaction of Business Rules (ToBR) of 1993, the Delhi Excise Act of 2009, and the Delhi Excise Rules of 2010. It claimed that the liquor mafia was also granted a benefit of Rs 144 crores.
“Indicates substantively of financial quid pro quo at the top political level, wherein the Minister In-charge of the Excise Department, Manish Sisodia, took and got executed, major decisions/actions in violation of the statutory provisions and the notified Excise Policy that had huge financial implications," stated the report.
The report claimed that Manish Sisodia reportedly waived off ₹144.36 crores on the license fee, to be paid by the private liquor vendors, under the pretext of the pandemic. He also caused loss to the Excise Department and provided benefits to liquor licensees by waiving the import pass fee of Rs 50 per beer case, the report claimed.
VIEW photos from the raids here
Previous Lt. Governor disapproved of the liquor policy
A major controversy erupted when it was noticed that retail liquor shops were opening in non-conforming areas like unapproved markets in the city where such activities were not permitted in the new policy.
A proposal was approved by the Delhi cabinet on November 5, 2021 to allow retail liquor vends to function in non-conforming areas as well until the Delhi Development Authority (DDA)/the Municipal Corporation of Delhi (MCD) could identify confirming locations in the non-confirming wards.
The cabinet decision was sent to then Lt. Governor Anil Baijal for his approval. Baijal, however, made at least six observations and advised the government to re-examine the policy and effect proper modifications.
The observations by the then Lt. Governor include: eligibility criteria for different kinds of licenses to rule out the possibility of monopoly/oligopoly which may impede healthy competition and encourage cartelization. It also mentioned that categories of licenses should be consistent.
The Lt. Governor also opined that since government liquor shops are closing, there should be some action plan for government employees and corporations which are financially dependent on the liquor business.
LG Baijal also objected to a provision in the new policy that authorised the deputy CM to make minor changes in the excise policy. He said that this provision is not tenable and minor or major changes should be done only with the approval of the cabinet.
U-turn on own stand
On July 22, the current Delhi Lt Governor VK Saxena, acting on the chief secretary’s report, recommended a CBI probe.
Few days later, on July 29, Manish Sisodia withdrew the new liquor policy and reverted to the older policy which permits government-owned shops to sell liquor.
Starting September 1, only Delhi government corporations will be allowed to run retail liquor shops as the capital will be returning to the old excise regime.
The corporations of the Delhi government Delhi Tourism and Transportation Development (DTTDC), Delhi State Industrial and Infrastructure Development Corporation (DSIIDC), Delhi Consumer's Cooperative Wholesale Store (DCCWS) have been entrusted with opening a total of 500 liquor vends from September 1.
Customers in Delhi can buy alcohol from the government corporation-run stores only.
Over 1,000 liquor brands, both desi and foreign, will be available for purchase at the government-run vends.
Before @NewIndianXpress broke the first story in any media that all is not well with the #DelhiExcisePolicy, there were a few things to take care of. Though @Shahid_Faridi_ had worked on the story for over three weeks, a response from #AAP was critical... https://t.co/DldK6BpcVS— santwanabhattacharya (@santwana99) August 19, 2022
Manish Sisodia accuses ex-Delhi L-G Baijal of changing stance
Sisodia, on August 6, in a letter to the CBI accused former lieutenant governor Anil Baijal of changing his stand over opening liquor vends in unauthorised areas.
"Under the new excise policy, 849 shops were to be opened across Delhi, including in unauthorised areas. The LG did not object to the proposal and approved it," Sisodia said.
However, on November 15 last year, two days before the implementation of the policy, the LG changed his stand.
"As a result of this change of stand by the LG, the shops could not be opened in unauthorised areas, leading to a loss of revenue of thousands of crores to the government. On the other hand, the shops that opened witnessed a huge income," Sisodia added.
Previous Lt. Governor Baijal’s reaction
Baijal said that during the implementation of the excise policy, he had flagged on several occasions "unlawful decisions" taken by the AAP government that had to be amended on files.
"Mr. Sisodia is trying to find some alibi for his and his colleagues' acts of commission and omissions. The charges are nothing but blatant lies and falsehoods being perpetrated by a desperate man to save his own skin," Baijal said.