Excise policies face CAG scrutiny in report

The Comptroller and Auditor General's (CAG) audit report on Delhi's liquor policy between 2017 and 2022 flagged multiple violations in quality control, licensing, pricing, and systemic enforcement failures within the system, according to officials familiar with the findings of the agency.

- Sanjeev K Jha, Paras Singh and Snehil Sinha

NEW DELHI:

The audit covers three years under the old excise policy and one under the now-scrapped 2021-22 iteration of the excise policy and highlights notional financial losses to the exchequer exceeding ₹2,000 crore.

To be sure, the report, titled "Performance Audit on Regulation and Supply of Liquor in Delhi," was submitted in March 2024. However, despite court intervention, it was not tabled in the Delhi assembly along with 13 other CAG reports prepared between 2017 and 2024.

People familiar with the findings say the report pointed to a string of major lapses in quality control, gaps in tracking liquor bottles through barcodes, violations in awarding licenses, and non-transparent pricing mechanisms. Originally, the audit was meant to cover the 2017-18 to 2020-21 period, but was extended to September 2022 due to substantial changes in the excise policy from November 2021.

The AAP did not respond to HT's request for a comment on the report.

Old Excise Policy Quality control: A critical concern raised in the audit report, according to the people cited above, was regarding quality norms. It found that many instances of "unreliable" testing certificates being accepted and test reports on compliance were issued from unaccredited labs.

The audit found that between 2017 and 2020, 12 wholesale, or L1, licensees submitted 173 test certificates from 15 labs, of which three were not accredited by NABL, two were not accredited for alcoholic beverages, and two lacked accreditations for biological tests.

Most labs were linked to the manufacturers themselves, according to the people.

In 2020-21, the CAG found that 12 L1 licensees did not submit any quality certificates, yet they were granted licenses without objections, the people said.

Furthermore, out of 2,323 required tests, only 37% were conducted, and just 52% adhered to BIS standards.