Delhi Liquor Policy Concentrated Control In Few Hands Despite Anti-Monopoly Objective

The Comptroller and Auditor General (CAG) report tabled in the Delhi Assembly on Tuesday has revealed that the now-scrapped Delhi liquor policy implemented by the previous AAP government increased the risk of monopolization and cartel formation by concentrating retail licenses in very few hands.

According to the report, while one of the stated objectives of the 2021-22 liquor policy was to prevent monopolies or cartels, the policy's actual implementation contradicted this goal. The policy divided Delhi into 32 zones containing 8,493 vends, allowing one entity to control a minimum of 27 vends. These licenses were granted to just 22 entities through tendering, significantly concentrating ownership compared to the previous system where 377 retail vends were operated by four government corporations and 262 by private individuals.

The CAG audit also noted several policy decisions with revenue implications were implemented without Cabinet approval or the Lieutenant Governor's opinion. These included relaxation of penalties for late license fee payments, changes to the MRP calculation formula for foreign liquor, and waivers or reductions in license fees.

The report highlighted substantial differences between recommendations from the Expert Committee, which had suggested creating a state warehousing corporation, and the Group of Ministers (GoM) headed by former Deputy Chief Minister Manish Sisodia, which instead granted wholesale licenses to private distributors. These alterations "changed the very basis of the need for change in the liquor policy," resulting in an overall revenue loss of Rs 2,002 crore.

The liquor policy scandal has led to the arrests of several AAP leaders, including party chief Arvind Kejriwal, Manish Sisodia, Rajya Sabha MP Sanjay Singh, and former Delhi Minister Satyendar Jain, on charges of financial irregularities in the policy's formulation.