Last Updated: 22 March 2024

New Excise policy was
-- Implemented on 17 November 2021
-- Withdrawn on 31 August 2022

First scam was alleged in India where Govt revenue increased 😃
-- Details & Proof further in the article

¶ New Excise Policy^[1][2][3]

New Excise policy not about selling more liquor, but curbing illegal sales

Shifts Revenue model to license fees based model^[4]
-- Govt revenue is majorly earned through licence fees
-- No reason to do illegal sale

Feedback from public

The Government received an overwhelming 14,671 comments/ feedback from the stakeholders/general public before launching the new Policy

Objectives

1. Stop black market sales/Elimination of liquor mafia
   => Legitimate Sales will increase
   => Liquor Company's earnings will increase

2. Ensure equitable distribution of liquor
   => Illegal sales & Illegal Liquor will be curbed
   => Legitimate Sales will increase
   => Liquor Company's earnings will increase

3. Increase Govt revenue
   More Official & legitimate sales => More revenue for Govt

4. People get quality liquor & services

¶ Problems in Old Excise policy^{[1:1][2:1][3:1]}

Incentive to under-report sales
The main income from old policy was from excise duty on sale. So sale was under reported

Un-even distribution of liquor shops

1. 80 wards in Delhi had no liquor shops
2. 45 wards had only one
3. One ward had 27 shops in a single mall
4. 58% Delhi was left under-served

i.e. leading to illegal liquor sales, poor quality liquor and encouraging black marketing

Poor Retail experience

“The current retail experience is like a jail. When you go to a shop, there is a grille and people rush and throw money to buy liquor. There is no dignity. It will no longer be like that,” -- Manish Sisodia, March 2021

Sufferings of Liquor store's neighbourhood
People used to drink in public places near these liquor shops causing public inconvenience

Inefficiency of Govt shops^[5]
40% Private individual shops used to sell more liquor than 60% Govt corporation run shops

i.e. an estimated loss of about Rs. 3500 crore of excise revenue annually^[3:2]

¶ Old vs New policy comparison^{[1:2][2:2][3:3]}

The following table gives an overview of what the new Excise policy is about:

¶ Insights from revenue data^[8]

First scam in India where Govt revenue increased :)

All below Data points are as per Delhi assembly official record. Reference Link to Delhi Assembly site^[8:1]

* _{as of Jul 2022 due to interference & intimidation^[7:1]}
** _{Since license fees is the main income source, the projected revenue is independent of actual liquor sales and is proportional to number of active shops.}

Similar policy approved in Punjab in June 2022 ^[10], lead to an increase of 41% excise revenue 2022-2023.^[11]

¶ Other related analysis

1. Analysis of The Alleged Excise Scam Increased revenue & busted allegations
2. Excise Policy: Factcheck & comparison with other states
3. Manish Sisodia A Political Prisoner Fighting Vendetta Politics

¶ Constant Opposition by BJP & its Withdrawal

Amid allegations of earning through commision from liquor shops^[3:4], BJP

• Protested with Chakka jam, blocking traffic and damaging public property by deflating tyres of DTC buses^[12]
• Excess powers of LG make implementing some policies impossible
  -- Sealed shops opened under new policy with help of MCD/DDA/Police^[13]
  -- 600+ shops opened under new policy was forced down to only 468 by July 2022^[13:1][14]
  -- In addition BJP allegedly used agencies (ED/CBI) to intimidate liquor vendors^[6:2]
• CBI probe ordered into Delhi Excise Policy by LG on 21 July 2022^[15]

New Excise policy was withdrawan on 31 August 2022 under pressure ^[4:1]

¶ Reforms by AAP govt before implementation of new Excise policy

• Strong steps to curb open liquor consumption^[16]
• Curb corruption of excise officers by random allocation/rotation of areas for inspection as opposed to fixed areas. This simple step caused increase of excise revenue of 25%, without significant increase in liquor sales. Govt excise revenue increased from 3400 crore (before AAP Govt) to 4240 crore in 2015-2016^[3:5]
• 3977 illegal liquor shops closed by Jan 2022 ^[3:6]

Effect of above reforms seen in table below :

REFERENCES:

---

1. https://webcast.gov.in/events/MTU1Ng--/session/MzY1MA-- (6:16:00 onwards) ↩︎ ↩︎ ↩︎

2. https://delhiexcise.gov.in/pdf/Delhi_Excise_Policy_for_the_year_2021-22.pdf ↩︎ ↩︎ ↩︎

3. https://www.outlookindia.com/website/story/heated-debate-in-delhi-assembly-over-new-excise-policy-sisodia-says-bjp-rattled/408313 ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

4. https://timesofindia.indiatimes.com/city/delhi/aap-bjp-spar-in-delhi-assembly-over-excise-revenue-losses/articleshow/99039948.cms?from=mdr ↩︎ ↩︎

5. https://timesofindia.indiatimes.com/city/delhi/allow-private-liquor-vends-to-operate-too-traders-to-delhi-government/articleshow/93399366.cms ↩︎

6. https://www.ndtv.com/india-news/days-after-lt-governors-red-flag-delhi-reverses-new-liquor-excise-policy-3207861 ↩︎ ↩︎ ↩︎

7. https://www.indiatvnews.com/news/india/delhi-liquor-shops-to-be-shut-from-monday-as-govt-withdraws-new-excise-policy-latest-updates-2022-07-30-796153 ↩︎ ↩︎

8. http://delhiassembly.nic.in/VidhanSabhaQuestions/20230322/Starred/S-14-22032023.pdf ↩︎ ↩︎

9. https://theprint.in/india/aap-bjp-spar-in-delhi-assembly-over-excise-revenue-losses/1476792/ ↩︎ ↩︎ ↩︎

10. https://www.business-standard.com/article/current-affairs/punjab-cabinet-approves-excise-policy-2023-24-with-rs-9-754-cr-target-123031001320_1.html ↩︎

11. https://indianexpress.com/article/cities/chandigarh/punjab-excise-revenue-increases-aap-8543885/ ↩︎

12. https://www.thequint.com/news/india/bjp-chakka-jam-delhi-government-new-excise-policy-liquor#read-more#read-more ↩︎

13. https://timesofindia.indiatimes.com/city/delhi/bjp-to-seal-14-more-liquor-shops-in-delhi-today-as-it-intensifies-protests/articleshow/90551981.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst ↩︎ ↩︎

14. https://www.indiatvnews.com/news/india/delhi-liquor-shops-to-be-shut-from-monday-as-govt-withdraws-new-excise-policy-latest-updates-2022-07-30-796153 ↩︎

15. https://www.thehindu.com/news/cities/Delhi/l-g-vinai-kumar-saxena-recommends-cbi-probe-into-delhi-excise-policy-deputy-cm-sisodias-role-under-lens/article65669885.ece ↩︎

16. https://indianexpress.com/article/cities/delhi/people-consuming-alcohol-in-public-places-to-face-fines-of-up-to-rs-10000-3104185/ ↩︎