Prime Minister Modi’s empty boast “abki baar 400 paar (this time, beyond 400 seats)” is now one that the Bharatiya Janata Party would dearly like to forget, for the party’s strength has been reduced from 303 seats in 2019 to 240 this year, making it wholly dependent now upon the continued support of two major regional parties that neither share his totalitarian goals, nor his Messianic image of himself.
This is the first time in 22 years as chief minister of Gujarat and then as prime minister of India, that Modi has found himself not in a position of untrammelled power. The question that lurks in every mind today is, will he be able to adjust his so far tyrannical style of governance to a situation he has never been in before?
Nothing he has ever said or done, either as the chief minister of Gujarat or prime minister of India, suggests that he will be able to do so.
This is because his single, consistent response to any political setback throughout these years has been rage.
Over the past 22 years he has turned this rage upon all those who have tried to thwart his ambitions. Beginning with former Gujarat home minister Haren Pandya in 2001, and ending most recently with Congress MP Rahul Gandhi, Trinamool Congress MP Mahua Moitra, human rights lawyer Teesta Setalvad and former Gujarat Intelligence chief R.B. Sreekumar, Modi has used one or other of the government’s law enforcement agencies to terrorise his political opponents. Today, Modi is venting his rage upon the Aam Aadmi party, and most viciously upon its founder, Arvind Kejriwal.
Modi’s rage against Kejriwal in particular, arises from the BJP’s rout in the 2015 Delhi state elections, barely a year after it had won all the seven Lok Sabha seats in Delhi, in 2014. Despite the BJP’s having repeated this success both in 2019 and 2024, Modi’s rage against AAP, and against Kejriwal in particular, remains unabated. In the nine years that have elapsed since then, Modi has stopped at nothing in his bid to discredit the Delhi state government and force it out of power in the national capital. When the Kejriwal government changed the state’s liquor licensing policy in 2021, he got the opportunity that he had been looking for.
The birth of a case
Taxes on liquor contribute between 15% and 30% of the annual revenues of state governments and are the second largest source of revenue (after the Goods and Services Tax) for all of them. But the consumption of liquor is frowned upon by the vast majority of poorer families in the country. In Delhi state, where the sale of liquor had remained a monopoly of the state since the late 1970s, it was also one of the principal sources of bribes and kickbacks to the lawmakers and administrators in the concerned departments. Therefore, when the AAP government decided to end the state’s monopoly and conduct the entire liquor trade via public auction it kicked over a hornet’s nest that the Modi government lost no time in taking advantage of to discredit the party in the eyes of the people of the city.
The first salvo on Modi’s behalf was fired by the chief secretary of Delhi, Naresh Kumar, who wrote, in a letter addressed to V.K. Saxena the then (and now) Lieutenant Governor of Delhi, at some point in the earlier half of 2022. In it he stated that “arbitrary and unilateral decisions” taken by Sisodia in his capacity as excise minister had resulted in “financial losses to the exchequer” estimated at more than Rs 580 crore… and “kickbacks…received by the AAP Delhi government and AAP leaders” from owners and operators of alcohol businesses for preferential treatment such as discounts and extensions in licence fee, waiver on penalties and relief due to disruptions caused by the COVID-19 pandemic, etc. were used to “influence” the assembly elections held in Punjab and Goa in early 2022.
Naresh Kumar. Photo: X/@iasnkumar
This letter is the bedrock upon which the Modi government has created the entire edifice of public disgrace and imprisonment without bail, of an elected chief minister, an elected deputy chief minister, and a Rajya Sabha MP who was a key organiser of the AAP in Himachal Pradesh, for periods ranging from three months to two years. The former Delhi health minister was also arrested and remains in jail to this day, but in a different case.
During this period, the Enforcement Directorate has turned the homes, offices and other premises controlled by the indicted persons upside down, but has failed to find, as the Supreme Court said while summing up the bail hearing of Sanjay Singh, “even a shred of evidence” against any of them.
In normal times any government agency would have closed the cases against the AAP leaders long ago. But Modi had taught the Enforcement Directorate the consequences of failure to do his bidding as far back as in 2016, in the National Herald case. On that occasio , when Rajan Katoch, the then director of the ED closed the case lodged against the Congress party by Subramaniam Swamy for lack of evidence, after investigating it for a full year, Modi removed him from his post immediately.
Since then, every head of the ED has been aware of the cost of failing to do Modi’s bidding. But others too have learned the lesson. That is the only explanation for the Delhi high court’s hasty overturning of the Rouse Avenue court’s decision to grant bail to Kejriwal. As has been pointed out in the media, the ED rushed to the Delhi high court, and the judge, Sudhir Kumar Jain, purportedly complied, even before he had received, let alone read, the Rouse Avenue court’s judgement.
Not surprisingly, therefore, when the ED could find no material evidence of the barrel loads of cash that the AAP had reportedly accepted from the liquor wholesalers, it resorted to presenting statements by various people who claimed that they had been the intermediaries between a ‘South Group’ of liquor manufacturers and bottlers and the Kejriwal government, and had arranged the vast transfers of cash that the Group made to the party.
Fearful of the Supreme Court granting Kejriwal bail, the government has now got the Central Bureau of Investigation to arrest the Delhi chief minister for essentially the same ‘crime’ that the ED has failed to make any headway proving.
So overwhelming has been the BJP’s propaganda blitz against the AAP, that no one bothered to remember that by 2022, the electoral bonds scheme had been in operation for more than four years and that AAP had received somewhere between Rs 52 and 65 crores by way of donations. This was far more than the Rs 22 crores it was accused of having transferred to Goa to fight the 2022 elections there.
Finally, the ED’s two principal “informers” are Raghav Magunta Reddy, son of one Magunta Sreenivasulu Reddy, a YSR Congress MP from Andhra Pradesh, and a Delhi businessman Dinesh Arora – who was himself under arrest at the time when Sisodia was arrested, and had turned an ‘approver’ for the ED, after being guaranteed a pardon for the transgressions he was accused of having committed. Readers of this article can decide for themselves how reliable, let alone truthful, their depositions were, from the fact that both the Reddys, father and son, had initially been indicted by the ED, and that while Raghav Reddy, along with Dinesh Arora were pardoned at the Rouse Avenue court in Delhi on October 4, 2023, Magunta Srinivasulu Reddy is now a Telugu Desam Party MP from Andhra, and was photographed recently with Modi, during the announcement of the TDP’s continuing partnership with the BJP.
A 2021 image uploaded by Magunta Sreenivasulu Reddy to Facebook, on his official account, showing him with Modi.
However the strangest feature of the ED’s case against Kejriwal and other AAP leaders is that at every hearing before – no matter which court – the ED has strenuously opposed bail for the four leaders of the AAP, on the grounds that it is still gathering evidence against them, and releasing them will make this exceedingly difficult, if not impossible. But if that is truly the case, then how was chief secretary Naresh Kumar able to write a letter to Lt Governor Saxena giving precise details of the amount of excise revenues lost by the government from the new liquor policy, the kickbacks obtained by AAP from liquor vendors, and the amounts of money that it had transferred to Goa to fight the assembly elections in 2022?
A plausible explanation
There are only two possible answers – either Naresh Kumar’s letter was a fabrication dictated by the Modi government, or the ED felt that the information it contained was insufficient and imprecise, and needed to be reinforced with more direct evidence.
Of these, the first is by far the more plausible explanation. This is for the simple reason that the new liquor policy not only did not cause a loss of excise duty revenues, but actually doubled them.
I have explained this point in an earlier article but the details are worth repeating.
Under the earlier policy, the Delhi government was both the wholesaler and the retailer of alcohol in the city. The government paid the manufacturer their ex-factory price plus 5%, took control of the liquor and bore the cost of transportation and storage till it was supplied to the retail outlets. The retail outlets were also all controlled by the government, but licensed from the premise owners.
This bureaucratic monopoly had a number of shortcomings: first, the number of brands of any particular spirit stocked by the government liquor shops was limited and not responsive to changes in public tastes and incomes; and second, the retail liquor shops were concentrated mainly in the high income neighbourhoods of Delhi. There were very few in the poorer areas of the city.
Over the years this policy had led to a serious loss of revenue to the government. High income earners began buying their liquor in Haryana. Because of the lack of shops near them, the poor were buying country liquor. AAP’s new policy corrected these distortions while simultaneously taking the government out of the liquor business altogether. The wholesalers paid a one-time tax of 14% on their sales in Delhi. The retail outlets were reorganised to ensure that there was an even distribution of these throughout the city. The government had divided the city into 32 zones, of which 20 were classified as affluent, and the remaining 12 as relatively poor. Each zone was divided into a number of principalities, each to be served by up to three retail locations. The retail locations were evenly spaced to ensure that every mohalla, and every section of the population, had equal access to a liquor shop. It then auctioned the liquor shop locations. These were then put up for auction.
In the first auction, the government garnered Rs 5,300 crore from the auction of locations in the more affluent 20 zones, and Rs 3,180 crore from the auctions in the remaining 12 zones. The lower paying capacity of the poorer areas was automatically reflected in the lower bids for these locations. An important side benefit of the new policy was that by giving easier access to licensed liquor in poor areas, it reduced the sale of illicit liquor within those areas.
Two months after the new policy came into operation, a civil servant, who withheld his name while sharing the above figures to Hindustan Times, told its correspondent that along with new brand licensing and some other minor taxes, the government expected to garner over Rs 10,000 crore a year from the sale of liquor in the capital. This was almost double the average of Rs 5,500-crore recorded in the previous three years, and the Rs 5,272 crore (excluding VAT) that was garnered between September 1, 2022 and August 31, 2023 after the return to the old policy.
Finally, in all the time that the ED has spent gathering evidence against AAP no one in the media has asked the most important question of all: if both the choice of wholesalers and retailers is made through public auctions, then where is there any space left for graft and favouritism? To the eternal shame of the Indian media, in the months since AAP leaders were imprisoned, no newspaper or television commentator has asked this question.
Prem Shankar Jha is a veteran journalist.
