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HT Explainer: In Delhi, decoding the excise controversy and the LG-CM battle
Delhi may slip back to the period in 2018 when a trust deficit developed between the elected government and the bureaucracy, with AAP alleging that officers were not coordinating with the elected government.
The implementation of a set of reforms under Delhi’s excise policy have triggered the latest round of confrontation between lieutenant governor (LG) VK Saxena and the Aam Aadmi Party (AAP) government led by chief minister Arvind Kejriwal.
After nearly four years of relative calm between the two offices in the capital (2018-22), a fresh face-off began soon after VK Saxena took over as the new LG on May 26 this year.
Saxena has taken a series of decisions which has sparked opposition from AAP. These include recommending a Central Bureau of Investigation (CBI) probe into AAP’s excise policy, denial of permission to Kejriwal’s official visit to Singapore, an Anti-Corruption Bureau (ACB) probe into alleged irregularities in the construction of seven temporary hospitals during the Covid pandemic, and holding meetings with department staff, a move that AAP said amounted to meddling in the elected government’s functioning.
Meanwhile, the steps taken by AAP in 2021-22 to introduce reforms in Delhi’s archaic liquor regime such as reducing drinking age to 21, allowing bars to open till 3am, opening super premium liquor stores, home delivery of liquor, seem to have hit a roadblock with the LG recommending a CBI probe into the excise policy 2021-22 over contentions that several procedures were altered and sidestepped to benefit private liquor barons and individuals, and that an investigation must be carried out.
The move follows sustained protests mounted by the Delhi BJP whose chief Adesh Gupta and leader of opposition Ramvir Singh Bidhuri, repeatedly demanding the repeal of the excise policy.
CM Arvind Kejriwal has termed the CBI probe move a ploy to arrest deputy CM Manish Sisodia, who is also the excise minister, and called the allegations “fake and baseless”. On July 5, Kejriwal had stated in the Delhi assembly that the Centre was likely to soon arrest Manish Sisodia by the end of August.
Why has the controversy erupted now?
The excise policy was implemented in November 2021 and the controversy erupted six months after the policy was implemented.
Chief secretary Naresh Kumar submitted a report to the LG on July 8. The report established prima facie violations of GNCTD Act 1991, Transaction of Business Rules (ToBR) 1993, Delhi Excise Act 2009 and Delhi Excise Rules 2010 “in addition to deliberate and gross procedural lapses to provide post tender undue benefits to liquor licensees for the year 2021-22”.
The report by the chief secretary to the LG was sent according to Rule 57 of the ToBR 1993, which mandates the chief secretary to flag any deviation from laid down procedures to the LG and the CM. The report was also sent to the CM.
What are the allegations?
An official in the LG office outlined seven decisions taken by AAP government, which were flagged in a report submitted by chief secretary Naresh Kumar. The LG recommended the probe on the basis of this report.
The seven issues included a refund of R30 crore to a bidder, a tweak in the calculation of a levy on imported beer, purported relaxations in provisions in tender documents for private retail licensees, waiving off R144.36 crore of licence fee due to the pandemic lockdown, and allowing bid winners to open alternate vends.
An official in LG office claimed, “It was done so with the sole aim of benefitting private liquor barons in lieu of financial benefits to individuals at the highest echelons of the government leading up to Manish Sisodia.”
What’s CM Kejriwal’s response?
CM Arvind Kejriwal rubbished the contentions as “false” and “baseless” and claimed that it was a ploy to arrest Manish Sisodia.
“There is no truth to any of the allegations. Sisodia is an honest politician. Sisodia has given hope to crores of children in the country that government schools can also be world-class. We are not scared of jail. You (BJP) are the children of Savarkar, who apologised to the British rule. We are the children of Bhagat Singh, who refused to bow down before the Britishers and sacrificed his life for the country,” he said at a press briefing last week.
Kejriwal also attempted to connect the dots between the CBI probe into a department headed by Sisodia and Satyendra Jain’s arrest with the AAP storming to power in Punjab and its growing footprint in other states.
What’s the political subtext behind the excise controversy?
AAP has called the CBI probe a revenge politics after AAP won Punjab and is expanding its footprint in other states, while the LG office has claimed that the probe is over “several deliberate procedural alterations designed to benefit private liquor barons and individuals”.
“We were already speculating that after the momentous victory of AAP in Punjab, the BJP-led central government and the Prime Minister will seek revenge from the AAP and especially Arvind Kejriwal, as they are scared of us. Kejriwal’s popularity is ever increasing, not in Delhi or Punjab, but in the entire country. Even in those states where we are yet to have a solid base, we are winning seats in panchayat and municipality elections, which include Madhya Pradesh, Karnataka, Haryana and Maharashtra. And we were geared up to see a repeat of 2016 fake investigation gimmick. BJP will try its best to stall the work of Delhi government by opening investigations against each minister. CBI, ED and the Income Tax department have been tasked with this,” said AAP chief spokesperson Saurabh Bharadwaj.
The Delhi BJP has questioned AAP’s narrative that this is about the politics of revenge politics. Leader of opposition Ramvir Singh Bidhuri claimed that under the new liquor policy, the government's control of the sale of liquor in Delhi was completely abolished and liquor shops were opened in the streets as well as in non-conforming areas which was a clear violation of the Delhi master plan. The government had no control over the price, quality, and collection of liquor.
“AAP lost the Lok Sabha seat represented by now Punjab chief minister Bhagwant Mann since 2014 and AAP is talking about expansion and rise. It has zero MP in the Lok Sabha,” said Bidhuri.
Tanvir Aeijaz, an associate professor of Political Science at Ramjas College, said while the CBI probe may be because of the lapses flagged by the chief secretary recently, the sudden renewal of the LG-AAP government conflict may be attributed to AAP’s expanding footprint, especially in the poll-bound states of Gujarat and Himachal. “AAP and BJP are political rivals, and after coming to power in Punjab AAP is trying to project itself as a future alternative to the BJP. In Delhi, the exercise for the delimitation of municipal wards is also likely to start soon. After the completion of the delimitation process, the municipal elections will also be held. The conflicts may be originating from political rivalry,” said Aeijaz.
Rahul Verma at Centre for Policy Research pointed out that given the past record of an uneasy relationship between the two offices in Delhi - of the LG and CM - it was only a matter of time that frictions would emerge once the new LG settled into his office. “While it is easy to bring political motives as the reason behind these frictions, the lack of clarity in separation of powers between the two offices are likely to mar the relationship unless a negotiated settlement is reached.
What does it mean for AAP in Delhi?
The move is likely to have a bearing on the functioning of the AAP government in the national capital from where the AAP, which rules Delhi and Punjab, draws maximum political energy.
The LG has asked the chief secretary to investigate Delhi government officers for their role in alleged irregularities in Delhi’s excise policy. While only those officers who would be found involved in lapses, if any, would face the music, the development may trigger a lack of confidence among the bureaucrats with regards to the elected government.
Delhi may slip back to the period in 2018 (from July 2018, relations between LG and CM improved) when a trust deficit developed between the elected government and the bureaucracy, with AAP alleging that officers were not coordinating with the elected government.
A Delhi government officer, who did not want to be named, said the situation is hostile for the bureaucrats to work and in such a situation, officers will think twice before signing documents pertaining to major policy implementations.
AAP’s Bharadwaj said the CBI probe into the excise policy was designed to stall the progress brought by the AAP government. “When our government completed one year in 2016, the Central government was extremely insecure, and they played every trick from the book to stall the progress brought by the Delhi government. The then LG got instructions from the Prime Minister's Office to put all the obstacles in the path of Delhi Government. Over 400 files of the Delhi Government were investigated. A scheduled committee was formed, and they claimed that the government had committed various scams and many people would go to prison. Nothing came out of that investigation,” Bharadwaj stated.
What’s the view of industry?
A Delhi based businessman, who runs a bar in south Delhi, said Delhi is one of the largest metropolitan cities in Asia but it is governed by one of the most archaic excise laws which limit drinking age above 25 years although citizens become eligible to vote to elect the government at the cusp of 18. The liquor stores shut by 10pm, bars are closed by 1am.
“Even in neighbouring Haryana the liquor policy is far more liberal and stable. The move may trigger a flight of business and customers to the neighbouring cities and Delhi will stand to lose only,” said the businessman, who did not want to be named.
Vinod Giri, Director General, Confederation of Indian Alcoholic Beverage Companies, said the reforms proposed in the policy may be delayed but they are not likely to be thrown into the dustbin. “The implementation of certain aspects of the policy have been questioned and the CBI will probe lapses in the implementation. The policy making is the right of the elected government and the reforms have not been questioned,” said Giri.
