Delhi Government Faces Scrutiny as CAG Report Highlights Rs 2,002.68 Crore Loss in Scrapped Liquor Policy
New Delhi, February 25, 2025 – A recent report by the Comptroller and Auditor General (CAG), tabled in the Delhi Assembly on Tuesday, has sparked controversy by accusing the Aam Aadmi Party (AAP)-led government of incurring a staggering cumulative loss of Rs 2,002.68 crore due to its now-defunct liquor policy. The policy, introduced in November 2021 and later scrapped amid allegations of irregularities, has once again brought the AAP administration under intense scrutiny.
The CAG report, a detailed audit of the government’s financial and administrative decisions, alleges that the liquor policy led to significant revenue losses for the state exchequer. The policy had aimed to overhaul Delhi’s liquor trade by transitioning from a government-controlled system to a privatized model, promising increased transparency and higher revenue through licensing fees and competition. However, critics, including opposition parties and now the CAG, have pointed to mismanagement and procedural lapses as key reasons for its failure.
Addressing the Delhi Assembly, Lieutenant Governor (LG) VK Saxena weighed in on the findings, stating that the CAG report “exposes the administrative failure of the AAP government.” He emphasized that the document provides a roadmap for corrective action, urging the government to reflect on its shortcomings and work toward better governance. Saxena’s remarks come at a time when the AAP is already grappling with political challenges and public criticism over its handling of various policy initiatives.
The liquor policy, which was rolled out with much fanfare, sought to modernize Delhi’s excise framework by issuing licenses to private players and introducing reforms like lowering the drinking age and allowing home delivery of alcohol. However, it faced immediate backlash, with allegations of favoritism in awarding licenses and a lack of oversight leading to its eventual withdrawal in 2022. The Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) have since launched probes into the matter, further intensifying the political storm surrounding the issue.
The CAG’s findings have added fuel to the fire, providing concrete figures to support claims of financial mismanagement. The reported loss of Rs 2,002.68 crore is being cited by opponents as evidence of the AAP’s inability to safeguard public funds. BJP leaders, in particular, have seized the opportunity to attack the ruling party, accusing it of prioritizing populist schemes over fiscal responsibility.
In response, AAP representatives have dismissed the CAG report as politically motivated, arguing that the losses cited are exaggerated and fail to account for the broader economic context. They maintain that the liquor policy was a bold reform aimed at curbing the liquor mafia and increasing state revenue, and that its premature scrapping—due to external pressures—prevented it from realizing its full potential. AAP leaders have also accused the LG and central government of using the CAG as a tool to tarnish their image ahead of upcoming elections.
The controversy surrounding the liquor policy is far from resolved. With investigations ongoing and the CAG report now public, the AAP government faces mounting pressure to address the allegations head-on. Political analysts suggest that this episode could have significant ramifications for the party’s credibility, especially as it seeks to maintain its stronghold in Delhi while expanding its national footprint.
For now, the ball is in the AAP’s court to explain the financial discrepancies outlined in the report and restore public confidence. As LG Saxena noted, the CAG’s findings offer an opportunity for introspection and reform—whether the government chooses to seize it remains to be seen. Meanwhile, Delhi’s residents are left watching a familiar political drama unfold, with the stakes higher than ever.