Distributive policy

Explained: Intended to boost revenue, Delhi’s new alcohol policy ran into problems from the start

The Delhi government’s policy on alcohol has faced stiff opposition since it was announced. While the AAP government argues it would end the alcohol mafia, the BJP has accused it of allowing liquor stores near schools and places of worship.

What is Delhi’s alcohol policy?

Proposed in 2020, it came into effect in November 2021. Delhi was divided into 32 zones, with each zone having 27 liquor outlets. This also marked the government’s exit from liquor vending – only private liquor stores now operate in the city and each municipal ward has 2-3 vends. It aimed to end the alcohol mafia and black marketing, increase revenue and improve the consumer experience, and ensure fair distribution of alcohol sales. The government has also relaxed the rules for licensees, for example allowing them to offer discounts and set their own prices instead of selling on the MRP set by the government. Following this, discounts were offered by vendors, which drew crowds. After opposition protests, the Excise Department withdrew the rebates for a time.

What changes have been made to the awarding of tenders?

Several licensees have encountered problems obtaining permission to open stores in non-compliant areas due to protests from the MCD, the opposition and the public. To this end, the excise department allowed them to open additional sales in compliant areas without obtaining approval from the competent authority. A total of 849 liquor store licenses were issued by the Delhi government last year, but several liquor stores closed due to financial losses. From 849 stores, it fell to 649 stores in May. This figure fell to 464 in June.

What does the chief secretary’s report say?

According to the officials, if any changes are made/proposed after the implementation of the policy, the Excise Department must submit them to the Cabinet and forward them to LG for approval. Chief Secretary Naresh Kumar, when appointed in April, uncovered alleged “procedural failures” and called on the Excise Department to respond. The report was sent to LG on July 8. The ministry responded to questions on July 12.