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The Delhi Excise Policy 2021-22 has stirred chaos and toppled stability when it had removed the government from operating liquor stores and granting full access to private vendors. Manish Sisodia, Excise department head had been alleged of giving undue benefits and to have grossly deflected from the laws. CBI has conducted raids in his house and an FIR has also been filed against him.

Key Takeaways

  • The Delhi Excise Policy 2021-22 is under controversy for ruling out government agencies to sell liquors and handing it over to the private vendors.
  • Deputy CM of Delhi, Manish Sisodia was accused of taking decisions without approval of concerned authorities and for providing undue benefits to licensees.
  • CBI probe was initiated upon a report stating irregularities in the policy and CBI has raided his home and other party member’s home regarding the same.

What is the Excise policy all about

The 2021-22 Excise Policy was formulated on recommendation of an expert committee. It was implemented on 17 November, 2021 which granted retail license to private bidders for 849 vends which were divided into 32 zones across the city of Delhi, controlled by 27 private vendors in each zone.

The new liquor policy first came into existence on 4 September, 2020 based on a report by an expert committee headed by the Excise Commissioner. The expert committee then laid it in the public domain for suggestions and ideas in October, and later filed a report on the same. It was tabled before the cabinet of Delhi on 5 February, 2021. The cabinet constituted a group of ministers to review the excise policy which was headed by Deputy Chief Minister Manish Sisodia along with the members including Revenue Minister Kailash Gehlot and Health Minister Satyendar Jain. The cabinet approves the reforms made by the ministers to the Delhi Excise Policy 2021-22. 

In April, 2021, the proposal was sent to Lieutenant Governor Baijlal for approval but he made more than six observations and directed the government to re-examine. He suggested on the eligibility for different license to prevent monopoly/oligopoly and promote healthy competition without cartelization. Lt. Governor suggested for an action plan to aid the government employees and organizations that depend on liquor business when the government was no more handling liquor vends. He condemned the provision in the new policy that permitted Deputy Chief Minister to make minor changes to the policy and any change can be brought up only with approval of cabinet.

His recommendations were accepted to be amended n the policy by the cabinet in May, 2021. Finally on 5 November, 2021 the Delhi cabinet authorized and approved the retail liquor vends to operate in areas which DDA has given access to, before the policy being implemented on 17 November, 2021.

The liquor policy brought in new changes as to the sale of alcohol in Delhi. Before the introduction of the policy, the liquor business was controlled by the state and no private players were involved. Only government owned can sell alcohol. Four government corporation ran around 475 stores out of the total 864 liquor stores in Delhi. After the implementation of the policy, 849 were given to private companies through open bidding following the exit of Delhi government from liquor business. Delhi government states that the policy would eliminate “liquor mafia” and increase revenue of government. Apparently, the policy change resulted in 27% increase in revenue for government, to Rs. 8900 crores

The new policy had provisions that increased the number of dry days a year from three to twenty-one, allowed bars and restaurants to stay open till 3a.m with permission, permitted private shops to offer discounts on MRP to attract customers, retail licenses that offered rebates and schemes on alcohol. It meant exit of government from retail liquor sale. The liquor store were allowed to be opened in malls, commercial areas, local shopping complex subject to rules. Many liquor stores however failed to open despite of being located in non-conforming areas of the city and many of them were sealed by the Municipal Corporation for violation.

Due to Covid-19, the excise department had waived an amount of Rs.144.36 crore on license fee and also refunded Rs.30 crore to the lowest bidder of airport zone when it encountered with a failure to obtain no-objection certificate from the airport authorities.

The policy was criticized that there was violation of rule 48(11)(b) of Delhi Excise Rules,2010  which states the successful bidder shall complete all formalities for granting license and failure upon which the deposits made will be forfeited to the government.

What led to the rise of the issue

On 8 July, 2022, Chief Secretary of Delhi, Naresh Kumar reported violation of the policy with procedural irregularity and undue benefits being granted to liquor licensees. Kumar sent a report to V K Saxena, Lieutenant governor, accusing Manish Sisodia for grant of undue benefits in return for money used by AAP in Punjab Assembly Polls. There was alleged breach of the Government of National Capital territory of Delhi Act, 1991, Transaction of Business Rules, 1993, Delhi Excise Rules, 2010 and Delhi Excise Act, 2009. 

It was purported that the private liquor vendors were granted benefit amounting to Rs. 144 crores in license fee, on account of Covid -19. The report stated that Manish Sisodia, Minister of Excise department had taken major decisions that violated the law and the Excise Policy had enormous financial implications. He has also caused huge loss to the Excise department by providing benefits to liquor licensees in waiving Rs.50 per beer case on import pass fee.

The controversy and the chaos set in when it was found that the retail liquor shops were operated in non-conforming areas like in the unapproved markets which were prohibited in the new policy. The Delhi Cabinet had earlier on 5 November, 2021 approved the recommendation to allow the retail liquor vends to function at non-conforming areas until DDA or Municipal Corporation of Delhi notify regardingareas to operatein non-conforming locations.

CBI Enquiry

On 22 July, 2022, Lt. Governor Saxena proposed for a CBI probe into the matter to check for violation of rules and procedural flaws upon the Kejriwal government’s Excise Policy 2021-22. The enquiry was based on Delhi Chief Secretary’s report in July which asserted violations of Government of National Capital territory of Delhi Act, 1991, Transaction of Business Rules, 1993, Delhi Excise Rules, 2010 and Delhi Excise Act, 2009.

On 28 July, 2022, Deputy CM Manish Sisodia who also holds the excise portfolio had directed the Excise Department to revert to the old regime of the policy for six months until a new one is being formulated, withdrawing the new policy. He reverted to the old policy which permits only government owned vends to sell liquor and the old excise regime will start to operate from September 1. Delhi government Delhi Tourism and Transportation Development, Delhi State Industrial and Infrastructure Development Corporation, Delhi Consumer's Cooperative Wholesale Store are entrusted for the functioning of 500 liquors shops from September.

Anil Baijlal was the then Lieutenant Governor of Delhi. Manish Sisodia, Delhi Deputy Chief Minister alleged that Baijlal altered his stand with regards to the opening of liquor stores in unauthorized areas, two days before it implementation. Manish Sisodia also claimed that Baijlal did not object to the suggestion on opening liquor vends in unauthorized areas but subsequently stipulated upon a condition that such vends need to get prior permission from the Delhi Development Authority (DDA) and the Municipal Corporation of Delhi. 

On 19 August, CBI conducted a raid at the residence of Manish Sisodia and three other AAP (Aam Aadmi Party) members.

CBI Raids

Central Bureau of Investigation (CBI) conducted a raid in Deputy CM Manish Sisodia’s residence on 19 August, 2022. Apparently, there was a liquor trader, Sameer Mahendru of Indospirits paid 1crore rupees to Radha industries, a company managed by Sisodia’s associate, Dinesh Arora.The CBI sleuths filed an FIR against Sisodia and 14 others which included liquor barons too on August 17. The FIR stated that, Manish Sisodia, Deputy CM, Arava Gopi Krishna, then Excise Commissioner, Anand Kumar Tiwari, then Deputy Excise Commissioner and Pankaj Bhatnagar, Assistant Excise Commissioner played a major role in recommending and taking decisions with respect to the 2021-22 Excise Policy, without prior permission of authorities with an intent to extend undue favors to licencees post tenders for personal gains. Former CEO of an entertainment and event management company (Only Much Louder) Vijay Nair,Amandeep Dhal, owner of Brindco Spirits, Manoj Rai, Sameer Mahendru, owner of Indospirits and former employee of Pernod Ricardwere also alleged to have contributed to the irregularities in implementing the policy. Dinesh Arora and Arjun Pandey, close associates of Sisodia were also alleged for deviating the undue pecuniaries from private parties to the officials.

FIR was filed under sections 120-B (Criminal Conspiracy), 477-A (falsification of records) of IPC and section 7 of Prevention of Corruption Act which talks about derivation of undue advantage to influence a public servant by any illegal or corrupt means or by exercise of personal influence on August 17.

Searchoperations were held at residences of three other AAP members. 21 locations have been raided by the CBI including seven states and Union territories, linked to the corruption in implementation of Delhi Excise Policy 2021-22.

Upon the allegations of corruption against him and several excise officers, CBI conducted raids at different places. Manish called this raid was made to target Delhi CM Arvind Kejriwal and not against corruption. CBI has seized phones and computers from the residence of Sisodia.

What did Sisodia have to say

In a letter to CBI dated 6 August, 2022 Sisodia accused former Lt. Governor Anil Baijlal of changing his stance over operating liquor vends in unauthorized areas. Anil had accepted opening of 849 shops in Delhi under the new Excise Policy even in unauthorized areas but two days before its implementation, he changed his stand to not operate in unauthorized areas. This change has resulted in huge losses of revenue of thousands of crores to government while the shops that were open had earned quite a good amount, said Sisodia.

Manish Sisodia was claiming innocence. CBI had booked him for corruption on 19 August, 2022. Sisodia said that the CBI are welcome to his and the party leader’s house, and that they are “extremely honest.” He said that the times are unfortunate and people are not recognized for doing good to the nation. Arvind Kejriwal, Delhi CM and AAP Chief Lead defended Manish Sisodia calling him the “best education minister of independent India” and “the father of education movement in Delhi”. Kejriwal said that Sisodia will also be arrested in a fake case like Satyendar Jain, Health Minister who was arrested for money-laundering. He stated, “I urge Prime Minister Narendra Modi to arrest all AAP MLAs in one go. Arresting them one by one puts brakes on the good work being done. Arrest them together so that after the arrest (when they are released), we can carry on with the good work." The BJP government asked Delhi government to come clean with its Excise Policy. There has been rumors stating that BJP wants to join hands with Sisodia and if he does, all cases against him shall be closed.

Baijlal responded that he had lagged on several decisions taken by AAP as unlawful and advised on amending them. He claimed that Sisodia is trying to find an alibi for the commission and omission of acts by him and his colleagues. He denied all the charges to be blatant and false.


After implementation of the new liquor policy in November, 2021, the Delhi government was completely deprived from entering and operating liquor stores. It was delivered absolutely to the private players. The policy was to increase government revenue and consumer experience. Upon a report filed against him, Sisodia reverted back to the old regime which allowed government to run the liquor shops.  Manish Sisodia head of the Excisedepartment was under CBI enquiry for deliberations and providing undue benefits to liquor licensees under the new policy. It is expected that ED may initiate a money laundering investigation pertaining to the policy.

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