The Delhi excise policy case centres on alleged irregularities in the formulation and implementation of the 2021-22 excise policy introduced by the Delhi government led by the Aam Aadmi Party (AAP).
The policy, rolled out in November 2021, sought to overhaul the national capital’s liquor trade by shifting from a mixed model of government and private retail to a fully privatised system. The government said the move aimed to curb black marketing, improve consumer experience and increase revenue.
Prior to the reform, liquor retail in Delhi was operated by a combination of government-run corporations and private licensees. Government entities such as the Delhi State Industrial and Infrastructure Development Corporation (DSIIDC), Delhi Tourism and Transportation Development Corporation (DTTDC), Delhi Consumer’s Cooperative Wholesale Store (DCCWS), and Delhi State Civil Supplies Corporation (DSCSC) managed a significant share of outlets across the city.
Under the new policy, the government exited retail operations entirely. All 849 proposed liquor vends were to be run by private players selected through open bidding. The city was divided into 32 zones, each comprising 27 retail outlets, each to be operated by private licensees through competitive bidding. Licences were issued zone-wise rather than for individual shops, with bidders required to take responsibility for all outlets within a zone.
The policy also restructured the wholesale segment. Private wholesalers were permitted to operate with a fixed margin, replacing the earlier commission-based structure. Officials said the move was aimed at streamlining the supply chain and ensuring uniformity in distribution.
A key feature of the new regime was its licence fee-based revenue model. “Instead of relying largely on per-bottle excise duties, the government sought to secure revenue through upfront licence fees determined via competitive bidding. The policy also allowed retailers to offer discounts and promotional schemes to customers, a departure from previous restrictions,” an official said.
Retail outlets were required to adhere to specified infrastructure norms, including minimum shop sizes and better storage facilities. The policy further permitted extended operating hours in accordance with prescribed rules and included a provision for home delivery of liquor, though the delivery mechanism was not implemented before the policy was scrapped.
The government stated that the changes were intended to curb black marketing, reduce alleged cartelisation in the liquor trade, and improve the overall consumer experience. Aligning prices more closely with neighbouring states was also cited as a measure to discourage cross-border smuggling.
In July 2022, following allegations of procedural irregularities and a recommendation for investigation by the Lieutenant Governor, the government withdrew the policy. The earlier excise regime was reinstated, and government corporations resumed control of retail liquor sales.
