Explained: Delhi Excise Policy Scam

Delhi Excise Policy Scam

Central Idea

A Delhi court has remanded a member of Rajya Sabha in Enforcement Directorate (ED) custody in the Delhi Excise Policy Scam.
This has created a big furore among people over the alleged involvement of a hardliner political party which was established solely to fight political corruption.

Background: Both individuals face corruption allegations related to the formulation and implementation of the Delhi Excise Policy 2021-22, which came into effect but was later scrapped.
Procedural Lapses: The allegations stemmed from a report submitted by Delhi Chief Secretary to the Lieutenant Governor in July 2022. The report pointed to procedural lapses in the policy’s formulation.
Financial Losses: The report claimed that “arbitrary and unilateral decisions” led to estimated “financial losses to the exchequer.”
Alleged Irregularities: It alleged that leaders received “kickbacks” from businesses for preferential treatment, such as discounts, license fee waivers, and relief due to disruptions caused by the Covid-19 pandemic. These funds were purportedly used for electoral influence.

ED’s Role: Following the CBI’s FIR, the ED asserted that the alleged proceeds of crime required investigation to establish the modus operandi.
Investigation Details: The ED alleged that the “scam” involved irregularities in the wholesale liquor business, margin-fixing, and receiving kickbacks. It claimed that the policy was designed with “deliberate loopholes” to benefit key figures.
Financial Transactions: The ED also alleged that individuals, acting as intermediaries, received substantial sums from a group, allowing them access to various businesses.

Policy Goals: The Delhi Excise Policy 2021-22 aimed to exit the state from the liquor business, eliminate black marketing, increase revenue, enhance consumer experiences, and ensure equitable distribution of liquor vends.
Private Operation: Under the policy, Delhi was divided into zones, each with liquor vends operated by private licensees. Licensees had the freedom to offer discounts and set prices.

Deviation from Procedures: A report in July 2022 highlighted deviations from established procedures in the policy formulation.
Market Distortions: The report pointed out that discounts offered by liquor retailers were causing market distortions.
Policy Reversals: It noted policy reversals, leading to questions about the justification for such changes.
Blanket Relaxations: The report flagged blanket relaxations granted for default in license fee payments.

Campaign Funding: The ED has alleged financial improprieties related to campaign funding.
Conduit for Financial Transactions: Individuals are alleged to have acted as intermediaries in financial transactions.
Involvement of Key Figures: The ED has claimed the involvement of certain individuals in meetings and interactions related to the case.

The scam has led to arrests and legal proceedings involving corruption allegations and procedural lapses.
Allegations of financial improprieties and irregularities in the policy’s implementation have created a complex legal landscape.
The involvement of the Enforcement Directorate adds to the intricacies of the case, while ongoing investigations seek to establish the veracity of the allegations.