Facing CBI heat over Delhi’s excise policy, deputy chief minister Manish Sisodia on Friday poked the BJP for its “indecision” on the extent of the “scam”.

“One person says the corruption is of Rs 8,000 crore. The second says Rs 10,000 crore. Third says it’s Rs 1,100 crore. Fourth says it’s Rs 144 crore. Fifth says it’s Rs 150 crore,” he said during a special assembly session. “The CBI FIR states that there was corruption of Rs 1 crore as some company transferred such and such amount to another...All are false.”

Before we scrutinise the extent of the alleged irregularities, first let’s see the excise revenue target set by the government.

When the now-scrapped policy was formulated, the Delhi government set a goal of earning Rs 9,500 crore a year in liquor licence fees and taxes by allowing private companies to open 850 shops in 32 zones. A state cabinet note dated August 2 stated that the Rs 6,720 crore came in the form of licence fee and VAT in 2021-22.

However, it does not give the break-up of how much of the total accounted for the months spanning November to March. (The policy was implemented from November 17 last year.)

In 2020-21, the excise revenue was Rs 7,039 against the target of Rs 8,911 crore. In the first quarter of the current financial year, the revenue tumbled by 37.51 percent to Rs1,485 crore against the budget estimates. The government cited two key reasons for the shortfall: court relief to several liquor vends in licence fees and prohibition on opening shops in non-conforming areas by the civic bodies.

Now, let’s look at various versions on the extent of the alleged scam.

Rs 1 crore

In its FIR on August 17, the CBI made two mentions of “exchange of money”.

First, it accused Sameer Mahendru, managing director of Indospirit Group, of transferring Rs 1 crore into the bank account of Dinesh Arora’s Radha Industries. Data from the ministry of corporate affairs lists Arora as director or partner in at least 13 hospitality and entertainment companies. The Delhi BJP has also accused him of being a middleman.

A second mention of money in the FIR also involved Mahendru. It said: “A person named Arjun Pandey has once collected huge cash amount of about Rs 2-4 crore from Shri Sameer Mahendru on behalf of Shri Vijay Nair.”

Nair, who has reportedly been associated with the AAP’s poll campaign and social media strategies, is the founder of Only Much Louder, an events management company, and is linked with three other companies. Nair is also credited with organising marquee music festivals and comedy shows.

Delhi BJP spokesperson Harish Khurana claimed Pandey is the CEO of India Ahead news channel, founded by Bhupendra Chaubey who is married to AAP MLA Atishi’s sister.

Atishi was not available for comment while Pandey did not reply to Newslaundry’s message.

Rs 30 crore

Puducherry-based Pixie Enterprises Private Limited won the licence rights for Rs 240 crore for 10 shops in the airport zone. As it could not get a no-objection certificate from the airport authorities, it approached the Delhi High Court to stake its claim to the NoC. The high court went against the liquor company as the airport authorities had a running agreement with Buddy Retail Private Limited of Amit Arora and Bhasker Venisheety.

Notably, Buddy also participated in the bidding process for the airport zone and emerged the fourth highest bidder with an offer of Rs 144 crore.

The government later returned a Rs 30 crore deposit to Pixie, which allegedly violated the excise rules. However, Sisodia said Buddy was granted the licence after it matched Pixie’s offer.

According to a letter from chief secretary Naresh Kumar and a report by the directorate of vigilance, the return of Rs 30 crore violated the Excise Rules. The vigilance report on August 4 alleged that excise officials on July 8 last year quoted an incorrect subsection from the rules to return the deposit.

The report said officials “referred to the provisions of Rule 48(10) of the Delhi Excise Rules, 2010, which is applicable in case of unsuccessful bidders. However, they did not refer to provisions of Rule 48(11)(b) which is applicable in case of successful bidders who fail to meet the requisite conditions”.

The latter subsection mandates that if successful bidders fail to get approvals from other authorities, their deposit will be forfeited. On the other hand, section 48(10) provides for the deposit return to unsuccessful bidders.

Rs 144 crore

The Delhi government imposed several Covid restrictions in December and January when the Omicron variant of Covid triggered a spurt in cases. With reduced working and liquor sale, vendors approached the Delhi government for licence fee waiver. The government waived 24.02 percent of the licence fee from December 28 to January 27.

“This resulted in undue benefit to licensee and loss of about Rs 144.36 crore to the public exchequer,” wrote the chief secretary in July.

The vigilance report objected to the percentage of the waiver. It said that even the 24.02 percent waiver was higher than the liquor sale drop of 21.60 percent.

The report also alleged that the government overruled the accounts department’s suggestion that the waiver should not be more than the reduction in sale.

In its defence to the vigilance department, excise officials said: “The economy was in shambles [during the Omicron wave]. As a responsible government, Delhi government provided a series of direct and indirect relief to several sections of the society.”

Rs 8,000-10,000 crore

BJP MP Manoj Tiwari claimed the state exchequer lost Rs 8,000 crore due to the now-scrapped liquor policy. Delhi BJP president Adesh Gupta went a step further and claimed that the AAP led by chief minister Arvind Kejriwal earned Rs 10,000 crore.

After the CBI raid at his house on August 19, Sisodia called these estimates nonsense.

At a press conference in Delhi on Friday, Tiwari explained the mystery behind the Rs 8,000 crore. He claimed that against a target of Rs 9,500 crore, the government collected only Rs 1,400 crore. Seemingly, he was referring to the Rs 1,485 crore that the government collected in the first quarter of 2022-23 while the target was annual. In the cabinet note, the Delhi government conceded that the shortfall for the first quarter was 37.51 percent.

Other ‘losses’ to exchequer

The vigilance report said the excise department in January reduced the number of dry days from 23 to just three for the year 2022. This, the report alleged, resulted in undue benefit to licensees after the tender process and loss to the exchequer. The Delhi BJP claimed the government could have quoted a better price for licences if it had made it part of the tender guidelines. The report also said the decision was taken without the approval of the lieutenant-governor Anil Baijal. The government defended the move saying that since 2019, the decision on the number of dry days has been taken by the minister in charge.

The chief secretary’s letter took exception to the government’s decision to remove a levy of Rs 50 per case of beer in November last year without Baijal’s nod. The vigilance department said the post-tender move benefitted only retail vendors without adding more revenue to the government.

Role of excise officials

After the vigilance report, LG Vinai Kumar Saxena ordered the suspension of 11 officials of the excise department on August 6 for alleged quid pro quo and flouting liquor laws. This includes former excise commissioner Arva Gopi Krishna, deputy commissioner Anand Tiwari, and assistant commissioner Pankaj Bhatnagar.

A 2012 batch IAS officer of AGMUT cadre, Krishna had served in the Andamans, Mizoram, Puducherry and even as deputy commissioner of the erstwhile North Delhi Municipal Corporation. In 2017, he received the PM award on behalf of the North and Middle Andaman district administration.

The vigilance report alleged that officials took decisions without getting clearance from the LG and some of them were “arbitrary”. The CBI FIR alleged that the three were “instrumental in recommending and taking decisions pertaining to excise policy for the year 2021-22 without approval of competent authority with an intention to extend undue favours to the licensees post tender”.

The FIR also named a former employee of a global wine and spirits seller, four directors of liquor companies that were given licences, and two firms.