The Delhi Liquor Scam Unraveled: Exposing the Nexus Between Politics and Business



The Delhi liquor scam has unfolded as a dramatic narrative of corruption, implicating some of the highest ranks of the Aam Aadmi Party (AAP) and unveiling a deep-rooted nexus between politicians and business tycoons. As the layers peel back, the scam reveals more than just financial discrepancies; it exposes a systematic exploitation of power that resonates with the challenges of governance in modern democracies.

The Roots of the Controversy

The Delhi liquor scam has emerged as the latest addition to the long list of scandals that have plagued the nation. The investigation not only led to the arrest of the Aam Aadmi Party’s (AAP) top leadership but also unveiled the intricate nexus between bureaucrats, politicians, and businesses. Speculations have been circulating, with some suggesting AAP as the culprit while others see this as a result of political rifts between opposition parties. To understand the true nature of this scandal, let’s delve into the case, considering all the chargesheets and court orders.

The Old Liquor Policy and Its Challenges

Prior to the introduction of the new liquor policy, Delhi had an old policy in place. Under the old policy, the entire city had 864 liquor shops, with 475 being government-owned and 389 privately owned. However, the old policy had some inherent problems that were causing significant losses to the Delhi government.

The primary challenge was the way the Value-Added Tax (VAT) was imposed on liquor sales. The old policy stated that if a bottle of liquor was sold, the Delhi government would charge a 25% VAT on it. However, many shopkeepers would underreport their sales, showing only 400-500 bottles sold out of the actual 1,000 bottles. This practice resulted in substantial revenue losses for the government.

Additionally, the liquor license system was plagued by the involvement of mafias and middlemen, who were making significant profits. Furthermore, the border states of Delhi, such as Gurugram, had fewer dry days and cheaper liquor prices, leading to people from Delhi purchasing liquor from these neighboring states, further eroding Delhi’s revenue.

The New Liquor Policy: A Gamechanger or a Pandora's Box?

Faced with these challenges, the Kejriwal government formed an expert committee in September 2020, headed by the Delhi Excise Commissioner, to address the issues and prepare a report to revamp the liquor policy. After a month of deliberation, the committee presented its recommendations, and on February 5, 2021, the Delhi government introduced the new liquor policy, touting it as a “gamechanger” and a “master stroke.”

The key changes introduced in the new policy included:

  • The government would no longer operate any retail liquor shops; instead, all shops would be privatized.
  • The license fee for these shops was increased from 6-7 lakhs to 5 crores.
  • The licenses would be awarded through auctions rather than a lottery system.
  • Delhi was divided into 32 zones, with 27 shops to be opened in each zone.
  • The minimum age for purchasing liquor was reduced from 25 to 21 years.
  • The number of dry days in Delhi was reduced from 23 to 3, and the sale time was extended to 3 AM.
  • The policy also introduced the facility of home delivery of liquor.

The government claimed that these changes would increase the revenue from 5,000 crores to 8,000 crores. However, the implementation of the new policy soon led to a series of controversies and allegations.

The Controversy Unfolds

As the new liquor policy was implemented on November 17, 2021, several issues began to surface. First, the liquor vendors were uncertain about the viability of the expensive licenses, and only 644 out of the planned 849 shops could be opened due to the requirement of obtaining approvals from the DDA and MCD.

Additionally, the policy was found to be in violation of multiple acts, including the GNCTD Act, 1991, the TOB Act of 1993, and the Delhi Excise Act of 2009. The Chief Secretary of Delhi, Naresh Kumar, submitted a report to the Lieutenant Governor, highlighting these irregularities and the lack of approvals for certain changes made to the policy.

One of the most concerning aspects was the allegation that the policy was designed to benefit the “South Group,” a cartel of liquor businessmen from South India. The investigation revealed that the draft of the new policy was shared with this group even before it was presented to the Delhi Cabinet, allowing them to influence the policy in their favor.

Furthermore, the policy led to a significant increase in liquor consumption in Delhi, from an average of 13.2 million litres under the old policy to 24.5 million litres under the new policy. However, this surge in consumption did not translate into increased revenue for the government, raising suspicions of foul play.

The Agencies Uncover the Scam

As the controversy deepened, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) launched parallel investigations into the matter. The agencies uncovered a complex web of connections and financial transactions that pointed to a well-orchestrated scam.

The agencies alleged that the top leadership of the AAP, including Deputy Chief Minister Manish Sisodia and Chief Minister Arvind Kejriwal, were involved in the scam. They claimed that the policy was designed to benefit the “South Group” in exchange for financial support for the party’s election campaigns in Goa and Punjab.

The agencies presented evidence of meetings between the AAP leaders and the “South Group” representatives, as well as the transfer of funds through hawala channels and the use of middlemen to facilitate the scam. The agencies also alleged that the policy was modified without the approval of the Cabinet or the Lieutenant Governor, further strengthening the case against the accused.The Aftermath and Ongoing Investigations

The revelations from the CBI and ED investigations have led to a series of arrests, including those of Manish Sisodia, Satyendar Jain, and Vijay Nair, a close aide of Arvind Kejriwal. The agencies have also filed multiple chargesheets, detailing the intricate financial transactions and the involvement of various individuals and entities in the scam.

The case has become a major political battleground, with the opposition parties, particularly the BJP and the Congress, demanding the arrest of Arvind Kejriwal and the dissolution of the AAP government. The AAP, on the other hand, has accused the agencies of political vendetta and has claimed that the charges against its leaders are fabricated.As the investigations continue, the Delhi liquor scam has become a crucial test for the country’s institutions and the rule of law. The outcome of this case will not only have significant implications for the political landscape of Delhi but also serve as a testament to the government’s commitment to addressing corruption and upholding transparency in policymaking.


The Delhi liquor scam has exposed the complex nexus between politics, bureaucracy, and business in India. The case highlights the importance of robust policymaking processes, effective oversight, and the need for stronger mechanisms to prevent the misuse of public resources for personal or political gain.

As the investigations progress, it is crucial for the public to remain vigilant and demand accountability from their elected representatives. The resolution of this case will not only serve as a lesson for the future but also set a precedent for how the country addresses similar instances of corruption and abuse of power.

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