Monday, November 26, 2012

2G Spectrum Allocation Saga


Spectrum is a national resource and a scarce commodity. Government allocates spectrum to telecom industry. However, allocation of 2G spectrum has been mired in controversy. It started as rumour in Delhi's grapevines. Pioneer, a newspaper, carried exposé on the matter at regular interval. It was becoming evident that something was not right in allocation of 2G spectrum. Then, nearly 2 years before around 2010, parliament seized on the matter. On demand of opposition, government initiated a Public Accounts Committee and later a Joint Parliamentary Committee probe. Meanwhile Supreme Court also responded to Public Interest Litigation and ordered a CBI probe.

It was clear that the then telecom minister along with senior members of ministry of telecommunications had been engaged in wilful manipulation of spectrum allocation policy to benefit his favourite operators. This resulted in loss of revenue to the exchequer of the government of India but also amounted to criminal conspiracy against other operators. To add insult to the injury groups that bought spectrum, many had no expertise to run telecom business, sold them to actual operators at nearly double their initial investment.  Government of India unwilling to act against the minister because government needed support of party to which minister belonged. however, court swung into action. It put not only minister, several bureaucrats and senior functionaries of business houses, court also cancelled all the licences granted.

Several lines of argument were propagated on the magnitude of monetary loss. Recently, government against reduction end 2G spectrum. However, it fetched, some say to unconcealed glee of government, only Rs 10000 crore. This prompted government to argue that calculation of 176000 was actually incorrect. Meanwhile, emerged another player. Mr R. P. Singh a retired former member of CAG team came on TV and proclaimed he arrived at a figure of 2000 crore as 2G loss, however, his report was rejected by CAG, who put the loss figure as 176000 crore. Both ruling and opposition parties jumped on the issue, and Mr. Singh appeared as a joker of the piece. Firstly, he claimed to have arrived at a loss figure that was changed by CAG. Then it emerged that Mr. SIngh had himself defended the revised number in PAC and/or JPC meetings.  To be fair, Mr. SIngh never claimed that anyone tried to influence CAG or get influenced by CAG. However, if everything is so cut and dried, what is Mr. Singh doing giving interviews? Is he wanting instant fame?  

Finally, the following are my take on the saga.  It is totally agreed that fraud was committed by minister in implementation of policy, in arbitrarily changing the date of application, in addition there is evidence that large sum of money also got transferred to certain account. Though it was later returned. The them minister went to jail and must be sent to prison for his acts of omission and comission. Question remains how much is the loss. There is no doubt the loss figure was projected based on data obtained from 3 G auction. It is also foolish to assume that auctioning 2G licence after 3G is already operational, is likely to fetch a lot of money. However, that does not negate the projection. However, two people in CAG office arrived at figures like 2000 crore to 176000 crore, nearly 80 fold apart. It is a genuine question, irrespective of who got influenced by whom, if any of these predictions were accurate? However, whether the loss is 2000 crore or 176000 crore, loss is still huge for a poor country like India. This cannot be a matter of politics. However, if someone had dictated CAG, if at all, about the finally projected number, then it should also be investigated.


Post a Comment