New Delhi, Feb 25: A report by the Comptroller and Auditor General of India (CAG), presented in the Delhi Assembly on Tuesday, has revealed serious irregularities in the now-defunct excise policy implemented during former Chief Minister Arvind Kejriwal’s tenure. The report estimates a loss of over ₹2,002 crore to the state exchequer due to what it describes as opaque and flawed policy execution—commonly referred to as the “Liquorgate” scandal.
Highlighting decisions allegedly taken to benefit select licence holders, the audit report stated that the policy’s goals were never fully achieved. It noted that retail liquor outlets could not be opened in non-conforming areas and there was an inequitable distribution of vends across zones. Additionally, the management of zonal licences was found to have several serious shortcomings.
Titled ‘Performance Audit on Regulation and Supply of Liquor in Delhi’, the CAG’s document lays bare the lapses in the excise policy that had become a focal point of political discourse during the recent Assembly elections. Prime Minister Narendra Modi had even referenced the issue on the campaign trail, vowing to hold the corrupt accountable with his oft-repeated phrase, “Jinhone loota hai, unhe lautana padega (Those who looted will have to return it).”
The report was formally tabled in the Delhi Assembly by Chief Minister Rekha Gupta, amid cheers and desk-thumping by BJP legislators. Lieutenant Governor V.K. Saxena also assured that the findings would be examined thoroughly and corrective actions would be taken to strengthen the excise system.
The controversial excise policy, now withdrawn, had earlier led to the arrest of several AAP leaders including former Deputy Chief Minister Manish Sisodia and Health Minister Satyendar Jain, in connection with corruption and money laundering investigations. Both leaders were later granted bail.
The CAG, under the leadership of Girish Chandra Murmu, detailed multiple areas where the policy failed to meet its objectives. These included the failure to maximize government revenue, curb the sale of illicit liquor, simplify tax structures, prevent cartel formation, and ensure fair and wide distribution of liquor outlets.
In a sharp recommendation, the CAG urged authorities to fix accountability for the lapses and reinforce enforcement mechanisms. The audit report was also signed by Aman Deep Chatha, Principal Accountant General (Audit), Delhi.
One major concern highlighted was the alleged approval of liquor vends in residential zones and near sensitive areas like schools and places of worship—without proper authorisation from the competent authority.
The report further criticised the previous administration for easing punitive measures against licence holders who defaulted on payments. It also flagged irregularities such as the unwarranted reduction or waiver of licence fees, refund of earnest money deposits for airport zones, and manipulation of pricing formulas for imported liquor.
According to the audit findings, a group of ministers (GoM), led by Manish Sisodia, reportedly ignored key recommendations made by an expert committee while framing the new excise policy. One of the most striking deviations was the allocation of up to 54 liquor vends to a single applicant—contrary to the panel’s suggestion of limiting the number to just two per individual.
Another contentious feature of the scrapped policy was the provision allowing retailers to offer discounts to consumers—something the report views as a breach of regulatory prudence.
The CAG also revealed that despite plans, the government failed to establish laboratories for quality testing of liquor—a lapse that potentially endangered public health.
The report painted a grim picture of policy implementation, noting a lack of transparency in pricing, improper issuance and renewal of licences, and multiple violations of approval procedures, including bypassing the Lieutenant Governor, Cabinet, and Assembly.
The government reportedly incurred a loss of approximately ₹890 crore by not re-tendering retail licences surrendered by vendors. Furthermore, the exchequer suffered an additional ₹941 crore loss due to exemptions granted to zonal licencees.
The report also identified several instances where financially interlinked entities held licences across the liquor supply chain, indicating a breach of fair competition norms. It added that supply data pointed to exclusive deals between zonal licencees and wholesalers, as well as evidence of brand pushing—another factor contributing to revenue leakage.
Despite the policy’s ambition to modernize liquor regulation, plans such as the launch of super-premium vends and enforcement of batch testing never materialized, the report concluded.
As political tensions mount over the revelations, demands for accountability and reform are expected to intensify in the days ahead.