2G SCAM IN INDIA

Telecom minister A Raja is facing the wrath of CAG, PIL filing institutions and court for awarding the 2G licence to new entrants in 2008 at price much below the market price causing a huge loss to the exchequer. The new entrants were awarded 2G pan India licence at cost of Rs 1,651 crore, a price fixed in 2001 when the subscriber base was only 45 million and the evaluation of telecom industry was low. Nine companies were issued licences in the process that was controversial from the very beginning. According to A Raja, the reason for such a step was to promote competition in Indian telecom sector, thereby benefiting the customer through low tariffs and better quality of services. A Raja insists there was no wrong doing.

After the allocation of spectrum, some months later, Swan Telecom and Unitech, two of the winners, sold large stakes in their operations to overseas companies at stupendous valuations. This triggered a huge furore. Opposition parties said Raja, by favouring a few, was involved in a scam worth Rs 50,000 crore, the loss to the government exchequer for selling the licences cheap. Petitions were also filed regarding the wrong doings in the allocation of spectrum. Currently, Supreme Court is hearing two petitions in this matter. One of them being filed by a NGO, Centre for Public Interest Litigation (CPIL). Even CBI has filed a case against unknown officials of the DoT and some private persons to investigate the irregularities in the 2G licences allocation.

Comptroller and Auditor General of India (CAG), the auditor of India’s state run institutions, in its queries to Department of Telecom (DoT) has alleged that Mr Raja’s failure to auction telecom licences in 2008 had led to losses of Rs 26,000 crore to the exchequer. DoT responded to the CAG by declining to reply to the queries of CAG claiming that it was a policy decision. DoT had also sought advice from Law ministry which said the Auditor had no right to challenge the policy decisions.

CAG has also alleged that new entrants were granted licence without proper verification of their credentials. CAG also asked the communications ministry to amend licence conditions of telecom operators and add a new clause enabling it to audit the accounts of private operators that recently bagged 3G and broadband wireless access spectrum. But DoT has refused to give into this demand and has decided to seek the law ministry’s opinion. In the latest development, CAG has issued drafts reports saying that 2G spectrum allocation has caused the exchequer a loss between Rs 26,000 crore to Rs 140,000 crore, depending on the formula used for the calculation of loss.
                                             
                                                                                                                                  By -  Sudhir Tripathi