The liquor policy rolled out by the Aam Aadmi Party (AAP) government in Delhi has come under fire following a report by the Comptroller and Auditor General (CAG) of India, which uncovered a significant Rs 2,002 crore revenue gap. The policy, which aimed to boost Delhi’s financial prospects by transferring liquor retailing to private players, has instead caused major shortfalls in the city’s revenue.
Introduced with the intention of modernizing the liquor market and reducing the government’s role in the retail liquor trade, the Delhi liquor policy promised to raise revenue through private license holders who were expected to operate liquor stores in the city. The AAP government believed that the scheme would lead to a more organized and transparent liquor trade, while boosting revenue collections for the state.
However, the policy’s shortcomings have now been laid bare in the CAG report. The document indicates that instead of increasing revenue, the policy led to significant losses due to weak regulation, insufficient oversight, and growing black-market activity.
The CAG’s findings point to several areas where the AAP government’s plan faltered:
- Implementation Failures: The report finds that the excise department failed to carry out its duties effectively, leading to substantial revenue leakage.
- Increased Corruption and Illegal Sales: The private operators were found to engage in unlawful sales of liquor, thus bypassing the system and reducing the overall revenue.
- Lack of Proper Audit Mechanisms: One of the most glaring issues identified was the absence of a clear framework to audit liquor sales and ensure proper tax collection from private operators.
Opposition leaders have been quick to seize on the findings of the CAG report, criticizing the AAP for mismanaging the policy and for the revenue losses incurred. Despite these criticisms, the AAP government has refrained from making immediate amendments, choosing to defend its policy as a means of promoting long-term growth and restructuring the liquor retail industry in Delhi.