The Comptroller and Auditor General (CAG) report on Delhi’s liquor policy, tabled in the Delhi Assembly on Tuesday, has highlighted major lapses in its implementation, leading to an estimated loss of ₹2,002 crore. The report alleges that a group of ministers (GoM), led by then Deputy Chief Minister and Excise Minister Manish Sisodia, altered the recommendations of an expert panel to benefit private players in wholesale liquor trade.
The 208-page report, part of a series of 14 audits planned by the BJP-led Delhi government, states that the expert panel had initially advised government control over wholesale liquor trade to prevent malpractices like dual ownership and illicit liquor supply. However, the GoM overruled this and allowed private entities to dominate wholesale operations.
Violations in Licensing and Market Control
The report points out that despite acknowledging that wholesalers were obtaining retail licenses through proxies, the GoM still issued L-1 licenses to private firms. It also criticized the shift from per-bottle excise duty collection to an advance license fee system, which disconnected revenue from actual sales.
Further, the audit found multiple violations in licensing, with evidence of common ownership between wholesale and retail licensees, breaching excise policy norms. One such instance cited a link between Indospirit (a wholesale licensee) and Khao Gali Restaurants (a zonal retail licensee), both having overlapping ownership structures.
Market Dominance by Few Players
The CAG report revealed that three entities Indospirit, Brindco, and Mahadev Liquor controlled nearly 72% of Delhi’s wholesale liquor market. Additionally, eight business entities holding 10 retail zones accounted for almost 45% of total liquor sales, while the bottom 10 zones contributed just 16.68%.
The report flagged concerns over wholesalers favoring specific zonal licensees, leading to potential brand monopolization and restricted consumer choices. It also questioned policy relaxations that enabled entities with shared ownership to dominate both wholesale and retail sectors.
The findings have reignited political debate over the now-scrapped excise policy, with opposition parties demanding further investigation into the alleged irregularities.