The Enforcement Directorate’s probe into the now-defunct New Excise Policy 2022 to reform liquor trade has put the decisions of the Delhi government’s Cabinet decision in this regard under a cloud.

While Deputy Chief Minister Manish Sisodia constituted an expert committee through an order of September 4, 2020, the ED probe has revealed, that a three-member Group of Ministers (GoM) — headed by Sisodia and including former Urban Development Minister Satyendra Jain, who is behind bars in a separate case, and Transport Minister Kailash Gehlot — went against the suggestion of the expert committee they themselves had constituted.

Main recommendations

One of the committee’s main recommendations, the agency said, was to separate manufacturers from wholesale operations which should be handed over to one government entity to avoid cartelisation. The ED has interrogated all the three ministers on this and cabinet decisions issue, sources said.

The GoM submitted its report to the Cabinet headed by Delhi Chief Minister Arvind Kejriwal on February 5, last year. The Cabinet accepted the GoM report and gave a nod to implement the new excise policy which was rolled out on November 17, 2021.

Policy making

Picking up irregularities in the policy making, the ED officials charged that the GoM ignored suggestions of the expert committee and public opinion and formulated the new policy to “perpetuate fraud”. The ED, in its remand application of Aurobindo Pharma director Sharat Reddy who was arrested on Thursday in connection with this probe, said the GoM also did not seek public opinion on its report indicating “high handedness and vested interests of certain politicians”.

“The policy formulated on the basis of GoM’s recommendations allowed private entities in the wholesale operations which resulted in shifting of profit from government to private entities. This route to market gave space for cartel formation. Moreover, the government lost the control and supervision over wholesale business,” ED’s court documents alleged.

The agency has found fault with the profit margin of 12 per cent fixed for the wholesalers even though there was no suggestion for it. “The profit margin was intentionally increased to 12 per cent so that 6 per cent kickback can be taken out from the same through formation of cartels,” the ED charged in the remand application. Also, a diluted concept of ‘related parties’ was incorporated in the excise policy ignoring the definition already existing in the Companies Act, 2013. This too was intended to promote cartelisation, apprehended the agency.

This has resulted in the loss of ₹2,631 crore revenue collection from licence fee, stated the ED. Interestingly, the ED probe has thrown the fact that all 34 important persons under the scanner changed a total of 140 phones (valued at ₹1.20 crore) with an intention to destroy digital evidence during the period of inquiry.

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