Delhi incurred losses of over Rs 2,000 crore due to flaws in the 2021-22 liquor policy by previous Aam Aadmi Party (AAP) government, according to a Comptroller and Auditor General (CAG) report tabled in the Delhi Assembly on Tuesday.

The report, one of 14 performance reviews of the AAP government, highlighted serious policy lapses, procedural violations, and ignored expert recommendations. It pointed out that then Deputy Chief Minister and Excise Minister Manish Sisodia "disregarded key suggestions" from an expert panel while formulating the now-scrapped liquor policy.
Revenue losses and licencing riregularities
The CAG report estimated a revenue loss of Rs 941.53 crore, citing failure to obtain timely permissions for opening liquor vends in non-conforming municipal wards -- areas not designated for liquor sales under zoning laws. This led to a significant financial impact on the Delhi government’s earnings.
Additionally, the Excise Department lost Rs 890.15 crore due to surrender of licences and the department’s failure to re-tender liquor zones.
The report also flagged an irregular waiver of Rs 144 crore granted to licence holders, citing Covid-19 restrictions, a decision personally approved by Sisodia despite finance department objections.
Key violations in policy implementation
The report further states that the Delhi Master Plan 2021 prohibited liquor vends in non-conforming areas, yet the Excise Policy 2021-22 mandated setting up at least two retail vends in each ward.
Despite tender documents clearly stating that liquor stores should not be set up in such areas, licences were still issued before addressing zoning concerns. On November 16, 2021, the Delhi Development Authority (DDA) disallowed vends in non-conforming zones, forcing licencees to approach the High Court, which later exempted them from paying Rs 114.50 crore per month in licence fees, resulting in further financial losses.
Policy lapses and political fallout
The CAG report also exposed procedural lapses in policy execution:
19 zonal licensees surrendered their licences before the policy expired in August 2022.
No re-tendering was done, leading to complete revenue loss from these zones.
The waiver of licence fees was granted despite the finance department’s recommendation against it.
The GoM (Group of Ministers), led by Manish Sisodia, altered expert committee recommendations, favouring private wholesalers, increasing retail outlets per bidder from 2 to 54.
Major decisions with financial impact were taken without Cabinet or Lt Governor approval.
The BJP has long alleged corruption and mismanagement in the liquor policy, using it as a major issue against the AAP government. Following a CBI probe recommended by Lt Governor VK Saxena in July 2022, several AAP leaders, including Arvind Kejriwal, Manish Sisodia, and Sanjay Singh, were arrested and spent months in jail.