Delhi to roll back excise policy but after a month

The 468 private liquor shops operating in the national capital were set to shut from August 1 as the term of their licences under the excise policy 2021-22 expires on July 31.

The Delhi government on Saturday announced the withdrawal of the new excise policy and said liquor will be sold only though vends run by the government but was considering a month’s extension to private shops, a decision that came amid a political row over Lieutenant Governor VK Saxena’s recommendation for a Central Bureau of Investigation (CBI) probe into alleged violations in the policy’s implementation.

Heavy rush outside a liquor shop at Karol Bagh in New Delhi on Saturday. (Raj K Raj/HT Photo)

While Delhi deputy chief minister Manish Sisodia said earlier in the day that all private liquor shops would shut from August 1, late-evening deliberations between top officials decided that the closure of such shops would be delayed by a month to avoid shortage and chaos at liquor vends, according to people aware of the matter.

The 468 private liquor shops operating in the national capital were set to shut from August 1 as the term of their licences under the excise policy 2021-22 expires on July 31. However, the excise policy 2021-22 is likely to be extended by a month. A formal order extending the licences for 30 days is likely to be issued on Sunday, officials said.

Based on a report of the Delhi chief secretary, Lt Governor Saxena has recommended a CBI probe into alleged violations of rules and procedural lapses in the implementation of the Excise Policy 2021-22.

On Saturday, Sisodia, who is also Delhi’s excise and finance minister, accused the Bharatiya Janata Party (BJP) of playing “dirty politics to promote liquor mafia” in Delhi. He said the arrangement of shutting the private shops would be temporary (for about six months) till the time a new excise policy is put in place under which fresh tenders will have to be floated for private entities.

Late on Saturday, a Delhi government official said: “The chief secretary flagged the issue of complete closure of liquor vends from Monday and non-availability of alcohol in Delhi as government stores would take time to open... It has now been decided that to avoid chaos and sudden loss of revenue, the existing private liquor shops will be allowed to open for another month. But from September 1, only government liquor shops will operate in the city until a new policy is put in place. Formal orders will follow soon,” the senior official said, asking not to be named.

A second official said: “This one-month period is being given to the government agencies to ready their shops, prepare their staff and arrange adequate stocks in the meantime.”

Responding to the developments, the LG’s office said: “Whatever changes have been made are from the government side. The LG office has no information about it as no file related to excise matters has come here.”

“There is a provision: from the government side, any decision is first approved by the cabinet and then comes to the cognisance of the LG. To the best knowledge of this office, no cabinet-approved decision has come before the LG for approval,” a spokesperson in the LG’s office said.

Addressing a news briefing on the issue earlier in the day, the Delhi deputy chief minister accused the BJP of using agencies such as CBI and the Enforcement Directorate to threaten liquor licencees and excise officials. The BJP, however, alleged that the AAP government’s “rushed” move was an “admission of violations and corruption” and it was “scared” of the CBI probe.

“Like Gujarat, the BJP wants spurious liquor to kill innocent people in Delhi, too. The BJP is threatening shop owners and officials in the name of ED and CBI to promote its liquor mafia. We will not let BJP sell even a drop of spurious liquor in Delhi. By hampering the Delhi government’s liquor policy, the BJP’s aim is to reestablish their illegal liquor business and increase its sale. We will not let BJP play with the lives of Delhi people. Hence, we have decided that for now, liquor will only be sold through government shops in Delhi,” Sisodia said.

The BJP said the Delhi government’s withdrawal of the excise policy vindicated its allegations of corruption against the AAP leadership. “It’s rather surprising that with the new excise policy, while the consumption of liquor went up, the revenue came down. The Kejriwal government increased the commission for liquor contractors from 2.5% earlier to a whopping 12.5% just to give benefits to the private liquor mafia. In the name of increasing this commission, corruption worth thousands of crores was committed,” said Union minister Meenakshi Lekhi.

Staff members at various liquor vends said that even if one month’s extension is given, there will be shortage of liquor at least for a few days next week as shops were clearing their stocks earlier in preparation to shut permanently from 10pm on Sunday. “Placing new orders and getting delivery will take some time. Besides, it will take at least 1-2 days for all formalities to be done. The first thing vendors will have to do is make the advance payment for the month. That itself takes a day because the excise department only accepts demand drafts, which have to be physically submitted,” a store manager at a liquor shop in Mayur Vihar said, asking not to be named.

Once the private vends are closed, only four Delhi government agencies — Delhi State Industrial and Infrastructure Development Corporation (DSIIDC), Delhi Tourism and Transportation Development Corporation (DTTDC), Delhi State Civil Supplies Corporation (DSCSC) and Delhi Consumer’s Cooperative Wholesale Store (DCCWS) — will be able to sell liquor in the city.

Senior government officials said formal procedures are yet to be completed for the implementation of the latest directive. The major decision requires a Delhi Cabinet approval, a senior government official said on condition of anonymity. “Some government shops were being run on rent or lease, so not all are vacant now. We are also reorganising staff distribution. Liquor stocks have to be ordered at least with a month’s buffer. It is not so easy and swift. It will take weeks for government shops to start in full swing,” another senior government official said.

When asked why the Delhi government took such a decision, Sisodia said many private liquor shop owners in the city have shut their vends as government officials are not ready to issue new tenders for licences out of fear of being probed by central agencies. “The BJP’s business of illegal liquor sale and corruption was not able to flourish in Delhi because of the Kejriwal government’s new excise policy (2021-22). So they (BJP) hatched a plan to fail the policy by threatening liquor shop owners and Delhi government officials through ED and CBI,” said the deputy chief minister.

The current excise regime expires on Sunday. It was implemented in November last year, with the Delhi government claiming it would increase their revenue, improve buying experience and end cartelisation and monopoly in the city’s liquor business.

A key decision in the contentious 2021-22 excise policy was the Delhi government’s decision to exit from the business of retail sale of liquor. But the plan did not appear to work out well as six months into the policy implementation, several licencees began surrendering their licences, complaining about high input costs compared to the revenue earned in the midst of stiff discounts being offered by some. As a result, of the 849 sanctioned private retail liquor vends, only 468 were functional.

The lieutenant governor sought a federal investigation into the elected government’s new policy earlier this month, citing an administrative inquiry that found alleged irregularities benefited certain companies and individuals.

Criticising the BJP-led central government, Sisodia said there were two kinds of excise policies in India currently. “First one is being implemented in Gujarat, where the BJP government has banned the sale of liquor in Gujarat. But everyone knows that the illegal business of liquor in Gujarat is growing rapidly. Dealers, who are mostly aides of BJP leaders, are selling illegal spurious liquor worth lakhs and crores,” he said.

“Unlike this, there is another model of the Kejriwal government in Delhi where the new excise policy 2021-2022 was introduced last year. Before the implementation of this policy in 2021-22, most of the liquor shops in Delhi were government shops and there was a lot of corruption in them. Along with them, there were a handful of private liquor shops of BJP leaders’ aides, which were charged very low license fees. Contrary to the laws, their fees were not increased annually. To end this corruption, the Delhi government made a new policy and tendered the liquor shops in a transparent manner,” said Sisodia.

To be sure, ₹9,500 crore was the projected revenue of the Delhi government under the new excise regime. But several zones had no takers for the retail sale of liquor, leading to a loss of revenue.

Delhi Pradesh Congress Committee president Anil Kumar said that the Delhi Congress had been protesting the new liquor policy from the outset. “The Delhi Congress was the first to complain against the new liquor policy to the LG and the police commissioner, with relevant documents, but the then LG did not act on it. When the incumbent LG VK Saxena ordered a CBI probe into the liquor scam, chief minister Arvind Kejriwal, who swears by the name of Shaheed Bhagat Singh, got scared and took a U-turn to roll back the new liquor policy, but has not yet sacked his excise minister Manish Sisodia. Kejriwal took the decision to roll back the liquor policy after his meeting with the LG on Friday to save himself from going to jail,” he said.

(With inputs from Sanjeev K Jha)