The Anatomy of a Scam – The New Indian Express

Express press service

The anatomy of a scam
How the AAP government gave windfall benefits to the few

Ever since The New Indian Express published the story of the Kejriwal government drafting a liquor policy to favor the few, this columnist has been inundated with calls and messages asking what could be wrong with a policy. which has helped bring down the prices of alcohol and make drinkers happy. That all was not well with the policy became apparent when the government withdrew it citing a huge drop in state revenue after its implementation. Here is a brief overview of the wrongs committed by the Delhi government. The new policy allowed wholesalers to offer discounts and rebates to retailers of their choice. This has tipped the rules of the game in favor of some retailers who have reaped windfall profits with the help of wholesalers. The old policy imposed uniform discounts on all retailers.

Following huge discounts received from wholesalers, some retailers have started offering a “buy one, get one free” program. More than half of all Delhi retailers could not survive these predatory prices and gave up their licenses. The Delhi government, instead of bringing closed retail areas back into competition, allowed existing areas to double their profits as shoppers from closed areas flocked to them. Increased sales by some retailers have not brought commensurate benefits to the government. In the new policy, the state moved from an excise tax-based revenue regime to a license fee regime. It reduced the excise duty from almost 200% on the wholesale price to 1% on sales.

In order to compensate, it has introduced hefty licensing fees of Rs 300 crore per retail area per year. But with half the areas closed, the government lost license rights and gained almost nothing from the doubling of sales of the operational half. As a result, while some retailers made windfall gains, state revenue fell to Rs 3,700 crore from Rs 6,300 crore the previous year. The government had announced that the new policy would increase its revenue to Rs 9,000 crore.

The state government also appears to have knowingly authorized violations of the provisions of the new policy. The policy states that manufacturers, wholesalers and retailers will work in their respective silos. A manufacturer cannot be a wholesaler or a retailer, likewise wholesalers and retailers cannot enter the other two businesses. But there are examples where the government turns a blind eye to many manufacturers going into wholesale and retail, and wholesalers get retail licenses.

Key conspirators
Politicians, a media house and friends of the AAP

The Delhi government’s new excise policy is said to have been drafted and executed with input from a collection of people outside of the government. These people are said to have worked closely with Deputy Chief Minister Manish Sisodia, who is also in charge of the excise department, and emerged as the main beneficiaries of the policy. Among them, Vijay Nair, former CEO of M/s Only Much Louder, an entertainment and event management company, Manoj Rai, who was until recently an employee of Pernod Ricard, Amandeep Dhal, owner of Brindco Spirits, Sameer Mahendru, owner of IndoSpirits, Amit Arora, director of Buddy Retail Pvt Ltd, Dinesh Arora, an alcohol trader, Sunny Marwah, director of companies/businesses run by the family of the late Ponty Chadha, and Arjun Pandey, who was a partner to a media company headquartered in South India.

These people are seen as close to Sisodia and their role in customizing the new liquor policy to grant unjustified favors to certain wholesalers, and handling alleged kickbacks from liquor licensees is now being probed by the CBI. The role of two major alcohol manufacturers would also be considered. Sameer Mahendru and Amandeep Dhal are associated with these two manufacturers. Sources said Vijay Nair’s company was allegedly involved in the Aam Aadmi party. Although a private person, Nair reportedly attended meetings Sisodia held with senior state government officials to finalize the new liquor policy.

There are reports that state government officials did not like Nair’s presence at meetings as he attempted to bulldoze them on Sisodia’s behalf. Magunta Sreenivasulu Reddy, a YSR Congress Party MP, was also a major beneficiary of Delhi’s new alcohol policy. Sri Avantika Contractors (I) Pvt Ltd, based in Reddy and Hyderabad, controlled almost a third of Delhi’s liquor sales through investment. The CBI is likely to look into the books of these two entities. The investigative agency has raked wide, but Manish Sisodia will remain at the center of its investigations.

The Anatomy of a Scam How the AAP Government Gave Windfall Benefits to the Few Ever since The New Indian Express broke the story of the Kejriwal government drafting a liquor policy to favor the few -a, this columnist was inundated with calls and messages asking what could be wrong. a policy that helped bring down the prices of alcohol and make drinkers happy. That all was not well with the policy became apparent when the government withdrew it citing a huge drop in state revenue after its implementation. Here is a brief overview of the wrongs committed by the Delhi government. The new policy allowed wholesalers to offer discounts and rebates to retailers of their choice. This has tipped the rules of the game in favor of some retailers who have reaped windfall profits with the help of wholesalers. The old policy imposed uniform discounts on all retailers. Following huge discounts received from wholesalers, some retailers have started offering a “buy one, get one free” program. More than half of all Delhi retailers could not survive these predatory prices and gave up their licenses. The Delhi government, instead of bringing closed retail areas back into competition, allowed existing areas to double their profits as shoppers from closed areas flocked to them. Increased sales by some retailers have not brought commensurate benefits to the government. In the new policy, the state moved from an excise tax-based revenue regime to a license fee regime. It reduced the excise duty from nearly 200% on the wholesale price to 1% on sales. In order to compensate, it has introduced hefty licensing fees of Rs 300 crore per retail area per year. But with half the areas closed, the government lost license rights and gained almost nothing from the doubling of sales of the operational half. As a result, while some retailers made windfall gains, state revenue fell to Rs 3,700 crore from Rs 6,300 crore the previous year. The government had announced that the new policy would increase its revenue to Rs 9,000 crore. The state government also appears to have knowingly authorized violations of the provisions of the new policy. The policy states that manufacturers, wholesalers and retailers will work in their respective silos. A manufacturer cannot be a wholesaler or a retailer, likewise wholesalers and retailers cannot enter the other two businesses. But there are examples where the government turns a blind eye to many manufacturers going into wholesale and retail, and wholesalers get retail licenses. Key conspirators Politicians, a media house and friends of the AAP The Delhi government’s new excise policy is said to have been drafted and executed with input from a collection of non-government people. These people are said to have worked closely with Deputy Chief Minister Manish Sisodia, who is also in charge of the excise department, and emerged as the main beneficiaries of the policy. Among them, Vijay Nair, former CEO of M/s Only Much Louder, an entertainment and event management company, Manoj Rai, who was until recently an employee of Pernod Ricard, Amandeep Dhal, owner of Brindco Spirits, Sameer Mahendru, owner of IndoSpirits, Amit Arora, director of Buddy Retail Pvt Ltd, Dinesh Arora, an alcohol trader, Sunny Marwah, director of companies/businesses run by the family of the late Ponty Chadha, and Arjun Pandey, who was a partner to a media company headquartered in South India. These people are seen as close to Sisodia and their role in customizing the new liquor policy to grant unjustified favors to certain wholesalers, and handling alleged kickbacks from liquor licensees is now being probed by the CBI. The role of two major alcohol manufacturers would also be considered. Sameer Mahendru and Amandeep Dhal are associated with these two manufacturers. Sources said Vijay Nair’s company was allegedly involved in the Aam Aadmi party. Although a private person, Nair reportedly attended meetings Sisodia held with senior state government officials to finalize the new liquor policy. There are reports that state government officials did not like Nair’s presence at meetings as he attempted to bulldoze them on Sisodia’s behalf. Magunta Sreenivasulu Reddy, a YSR Congress Party MP, was also a major beneficiary of Delhi’s new alcohol policy. Sri Avantika Contractors (I) Pvt Ltd, based in Reddy and Hyderabad, controlled almost a third of Delhi’s liquor sales through investment. The CBI is likely to look into the books of these two entities. The investigative agency has raked wide, but Manish Sisodia will remain at the center of its investigations.