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Why the CBI raided Delhi Deputy CM Manish Sisodia's house

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Mohammad Bilal
Mohammad BilalAug 19, 2022 | 17:28

Why the CBI raided Delhi Deputy CM Manish Sisodia's house

Delhi Deputy CM Manish Sisodia. Photo: India Today Archive

The Central Bureau of Investigation (CBI) on Friday (August 19) raided 21 locations including the residence of Deputy Chief Minister of Delhi, Manish Sisodia. The raids were conducted in connection with corruption in Delhi government's now withdrawn Delhi Excise Policy 2021-22. 

What is the case? It all began on July 8 when the Delhi Chief Secretary Naresh Kumar submitted a report to the Lt Governor of Delhi Vinai Kumar Saxena, highlighting the irregularities in the implementation of the new Delhi excise policy. A copy of the report was also sent to Sisodia and Delhi CM Arvind Kejriwal.

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  • The report accused Sisodia of providing undue benefits to few liquor vend licensees in lieu of "kickbacks" and "commissions". He is in-charge of excise department of Delhi government. The allegations pointed grave discrepancies in his work.
  • On July 30, Sisodia scrapped the new liquor policy within eight months of its roll out. Only government-owned liquor vendors will be allowed to sell alcohol in the capital from September 1. 
CBI officials at the residence of Delhi CM Manish Sisodia. Photo: PTI

What was the new excise policy? The Delhi government's new excise policy came into effect in 2021. The new policy paved the way for private vends to sell liquor in the national capital. The policy marked the end of Delhi government from liquor sale.

  • Delhi was divided into 32 zones and each zone had 27 liquor vends. There had to be a total of 849 spacious and air-conditioned vends. Each municipal ward was to have 2-3 vends.
  • The aim of the policy was to eradicate black marketing, increase government's revenue, ensure equitable distribution of liquor vends and to also end the control of liquor mafia.
  • The government also made the rules flexible for the licensees like setting their own rates and allowing discounts as per their own will instead of selling at the fixed MRP set by government. After this, discounts were being given by vendors which attracted a lot of customers.
  • The new policy also aimed to ease consumer's purchasing of liquor where one wouldn't have to stand in long ques and could get a home-delivery of liquor. Moreover, many private vends also gave the option of tasting the liquor before purchasing it, something which an ordinary consumer would prefer. 
  • Under the old excise policy, four government corporations sold liquor from 864 vend. The rest were owned by private individuals. 
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Delhi Deputy CM Manish Sisodia and CM Arvind Kejriwal. Photo: India Today Archives

What went wrong? According to the report submitted to the LG and CM, Sisodia made certain changes in the policy without the approval of L-G. One of the major changes was the waiver of Rs 144.36 crore on tendered license fee on account of Covid-19 pandemic, Indian Express reported. The report also alleged that Sisodia gave benefits to liquor licensees by revising the rates of foreign liquor and also removing the levy of import pass free of Rs 50 per beer. This made foreign liquor and beer cheaper for the retail market but it also incurred loss to the state exchequer. 

But, as per law, if any changes are made in the excise policy, they  have to be placed before the cabinet by the excise department and also forwarded to the L-G for the final approval. Any changes that are made without the approval of LG and cabinet are illegal and in violation of Delhi Excise Rules, 2010 and Transaction of Business Rules, 1993. 

Not just CBI: Along with CBI, the Economic Offenses Wing (ECW) of Delhi Police was also informed by the Chief Secretary of the "illegalities, cartelisation and monopolies" in the liquor trade and he had asked them to investigate the matter. The ECW is also conducting its investigation in the case.
 
How did the policy work?  The government made around Rs 8,917 crore through bidding against the reserve price of 7,041 crore. However, the roll out wasn't smooth as expected. Corruption and favouritism allegations led to withdrawal of the policy after eight months.

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  • Around 644 vends were operating after the roll out and soon retailers started surrendering their licenses as the business started to go down.
  • As the Delhi government allowed sellers to sell below the MRP to promote healthy competition, it turned against the small retailers who started incurring losses because of the deep discounting by bigger retailers. 
  • By June, 90% of the liquor in market was selling at 50% discount. Only those licensees who had operations and wholesale businesses were able to survive.
  • By July 31, when the Delhi government decided to go back to the old scheme, only 468 outlets were functioning.
     
Last updated: August 19, 2022 | 17:49
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