Is Delhi Excise Policy Biased Towards Few Corporates? Or Political Vendetta ?
On 7th May, a special court hearing the Delhi Liqour Policy case (one which has been used to arrest Manish Sisodia on Education) granted bail to 2 accused saying “there is no incriminating evidence against Rajesh Joshi and Gautam Malhotra”.
This observation confirmed the widespread belief that the centre was indulging in deliberate harassment of AAP leadership and party affiliated folks with a view to prevent the Delhi govt from delivering successful governance initiatives which would give them political advantage.
The liquor policy has been adapted and adopted in Punjab as well giving early success in driving govt revenues up by 41% (see picture). This prompted me to review the Delhi Excise Policy with a view to examine if there was any bias towards any particular group/business (as we see in the case of regime’s favourite businessmen).
It’s a bit long but I hope it helps you understand the policy framework better and decide for yourself whether AAP is indeed guilty in bringing a biased policy favoring a few corporates (as alleged in the case) or is the Centre playing “dirty politics” that we have become accustomed to now.
Link to policy — https://delhiexcise.gov.in/pdf/Delhi_Excise_Policy_for_the_year_2021-22.pdf
A. Objectives of the Policy
- Generate optimum revenue for the Govt
- Eradicate Spurious Liquor
- Not allow formation of Cartels
- Promote consumer choice
Looks reasonable. Lets assume this is only posturing for now.
B. Framework for Grant of License
A simple scan of the framework will show that clearly the stated goal is to “help” high-end professional business entities with prior experience, expertise, financial resources.
Now this sounds fishy indeed!! Isn’t it better to give licenses to entities with zero experience in Airports, Defense Aircrafts etc as the Centre has shown the way??
C. Eligibility Criteria
The eligibility criterion further strengthens the case for “high-end” experienced, existing ventures. Surely, AAP takes a full 180-degree reverse view on awarding lucrative contracts and their approach is anti-national. Also, by now this is established as a crime in #NewIndia.
Startup Unfriendly
Clause iv explicitly requires 150 cr turnover every year for 3 years. And prohibits clubbing of revenues for smaller players. Clearly this protects incumbents with experience and scale in liquor business. Folks close to Centre with zero experience can’t bid for liquor licenses in Delhi. Also, with so much focus on #StartupIndia, this is clearly anti-startups and therefore not in the interest of the nation.
Also, the policy does not allow mixing retail and wholesale licenses to create monopolies. Surely this is “favoring” one over other. Which one? I am not sure. But both wholesalers and retailers who were looking forward to creating a joint venture will be disappointed. Surely AAP should have alowed businesses to control the entire supply chain — Mfg — Wholesale — Retail. How else will businesses scale and become monopolies who can then fund electoral bonds, private care trusts etc?
D. License Fee
At 849 licenses (Page 13) for Rs. 5 cr each, Govt wanted to collect Rs. 4,245 cr just from licenses.
Clearly this would have enabled them to do more for Education, Health and Infra development which could keep them in power for another 10 years. The Centre has tried its best to limit the state’s share of taxes to historic low figures inspite of booming state coffers. This huge license fee would undo all of Centre’s hard work in restricting the ability of AAP govt to provide “freebies”.
Such selfish politics from AAP had to be stopped. Clearly.
Key Takeaways
I could only analyse first 6 pages of a 26 page policy document. We can clearly see that it is against new entrants, startups, there was no room for inexperienced, new players to benefit from Delhi’s love for the tipple and indeed the policy favours only experienced, financially sound businesses. It prevents scale of businesses as it limits the control over the supply chain. Further, it gives AAP a recurring 4000+ crore revenue which makes AAP stronger with its welfare policies.
In a country where airports, ports, mines, defence etc is now given to newer players with zero experience, this is indeed a crime. Generating huge revenues will give Delhi govt more teeth — something that Centre can not digest. Therefore it must be illegal.
Sisodia must stay in Jail. QED.
