DELHI EXCISE POLICY

CONTEXT

The New Delhi Excise Policy 2021-22, launched in November, which sought to ensure optimum revenue for the state government, confront the sale of spurious or bootlegged liquor and transform consumer experience, ran into protests and widespread allegations of procedural lapses. This has forced the government to scrap it with effect from August 1, 2022.

CHANGES MOOTED IN NEW POLICY

• It marked the exit of the state government from liquor retail in the city. It sought to provide more choice to alcohol consumers by offering more variety of brands, through opening more liquor vendors.
• It sought to provide a “better environment “to female citizens while shopping for liquor through dedicated alcohol vends.
• In addition to reducing the number of dry days in Delhi from over 20 to just three, it also sought to reduce the age of alcohol consumption in Delhi from 25 to 18.
• It also sought to ensure equitable distribution of alcohol vends in the city by ward to bridge the gap between "overserved" and" underserved “areas.
• Under the new policy, the number of liquor vends in Delhi would have increased from around 630 to850- all privately owned and operated.
• One person could hold more than one liquor retail license and the heavily regulated excise regime under the previous policy was simplified for ease of doing business in overall trade.
• Another change in the policy was making wholesale licensees (L1) independent of manufacturers, the revamped policy allowed independent entities to set up wholesale stores and get a franchise from various manufacturers.
• The revamped policy was implemented on November 17, 2021, and remained in force till July 31, 2022.

CONTROVERSY OVER REVAMPED POLICY

• Protest against the opening of liquor shops in their neighbourhoods was led by citizens.
• BJP and Congress protest against the opening of liquor vends at locations near schools, religious places, and unauthorized areas.
• Many of these were sealed by the Municipal corporation of Delhi for violations related to non-conforming areas where certain businesses such as liquor retail are not allowed as per the provisions of the Master Plan for Delhi that governs urban planning and implementation in the city.

WHY WAS THE NEW POLICY ABRUPTLY WITHDRAWN

• In July Delhi Lieutenant Governor recommended a BI probe into the new policy after receiving a report from the chief Secretary, stating that the policy was rife with alleged violations and deliberate and gross procedural lapses.
• Sisodia who holds an excise portfolio alleged providing undue financial favours to liquor licenses. He has been booked for corruption by the CBI along with fifteen others including liquor business owners and event media barons.
• Around midnight on July 31, the LG received a proposal from the Delhi cabinet to scrap revamped policy and revert to the old policy for six months

HOW MUCH REVENUE DOES DELHI EARN FROM EXCISE

In 2019-20 rupees 4000 crores were generated in excise revenue. In November 2021 and July 2022, it earned approximately rupees 5,400 crores, but the controversy led to a fall in revenue.

Delhi government admitted a loss of over rupees 193 crores every month.