The audit of Delhi’s excise system found major irregularities in liquor supply monitoring and barcode tracking, with a financial impact of ₹2026.91 crore.
23 March 2026, New Delhi.
The audit conducted on the excise system in Delhi has highlighted serious irregularities in the regulation and monitoring of liquor supply across the National Capital Territory. Covering a four-year period from 2017-18 to 2020-21, the audit examined the functioning of the supply chain for Indian Made Foreign Liquor and Foreign Liquor, along with aspects of country liquor supply related to seizure activities. Due to major policy changes introduced in November 2021 and their subsequent withdrawal from 1 September 2022, the audit scope was extended to include this additional period as well. The findings revealed systemic weaknesses in how the Excise Department regulated and tracked liquor distribution, resulting in significant financial implications estimated at ₹2026.91 crore. The audit was conducted based on provisions of the Delhi Excise Act 2009, Delhi Excise Rules 2010, ESCIMS user manuals, and various policy guidelines issued by the government and the excise department.
Major Lapses in Supply Chain Monitoring System
A key focus of the audit was the Excise Supply Chain Information Management System, known as ESCIMS, which was intended to track liquor movement and sales through barcode scanning. However, the audit found that the system failed to effectively monitor sales, with nearly 28 percent of total transactions bypassing the system through a practice referred to as “stock-take-sold.” This accounted for approximately 136.53 crore barcodes that were not properly tracked within the system.
Further analysis revealed that around 21 percent of liquor sales were not scanned at point-of-sale terminals, indicating gaps in real-time tracking. During the period from 2017 to 2021, between 14 percent and 48 percent of sales remained unscanned, raising concerns over transparency and accountability. Additionally, the audit found that nearly 25.70 crore barcodes could not be accounted for, pointing to serious deficiencies in record-keeping and monitoring mechanisms.
These lapses enabled the possibility of diversion of liquor without proper tracking, which could result in loss of excise revenue. The audit also noted that the department failed to provide adequate explanations for the missing barcode data, further weakening its position on accountability.
Financial Irregularities and System Weaknesses
The audit highlighted financial irregularities in the implementation of ESCIMS, including a payment of ₹24.23 crore made to the implementing agency despite non-compliance with contractual obligations. It was also observed that key modules such as the Excise Intelligence Branch system were not functioning effectively, with little or no usable data available for analysis.
Another critical issue was the absence of a proper exit management plan for the system, even after nearly a decade of its implementation. This raised concerns about long-term planning and asset creation within the department. The audit further pointed out that the lack of a dedicated information technology cadre and weak monitoring mechanisms contributed to the inefficiency of the system.
Recommendations for Strengthening the System
The audit made several recommendations to improve the excise monitoring framework. These included the implementation of real-time barcode tracking to ensure transparency in liquor sales and distribution. It also suggested the use of data analytics and artificial intelligence tools to enhance monitoring capabilities and detect irregularities more effectively.
The audit recommended strengthening the Excise Intelligence Branch module and ensuring strict compliance with service-level agreements. It also emphasized the need for a comprehensive exit management plan for systems like ESCIMS and called for the creation of a strong monitoring team with adequate technical expertise to oversee operations.
Department’s Response and Corrective Measures
In response to the audit findings, the Excise Department stated that achieving 100 percent barcode scanning was challenging due to technical issues such as connectivity problems and power outages. The department also maintained that there was no actual revenue loss, arguing that taxes were collected at earlier stages of the supply chain.
The department reported that penalties had been imposed in cases of discrepancies and that monitoring of service-level agreements was being carried out regularly. It also informed that a new e-excise portal had been introduced to replace the existing system and improve efficiency. Additionally, the department clarified that data related to the Excise Intelligence Branch was maintained separately.
Despite these responses, the audit findings underline the need for significant improvements in monitoring systems, data management, and policy implementation to ensure transparency and accountability in Delhi’s excise operations.
