The ruling National Democratic Alliance was in a party-mode after its win in the recently concluded state assembly election of three states when it a multi-million “scam” was revealed which has spilled beans and put the government on a back foot in front of opposition parties. The Central Bureau of Investigation (CBI) while conducting the investigation landed at the office of A. Raja, Cabinet Minister, Telecom & IT following a trail on the controversial 2G spectrum auction. In his defense Raja revoked names of top Cabinet ministers. The offices of his ministry were raided by the CBI in a bid to find missing links in the case which is estimated to be worth INR 60,000-crore though the CBI charge sheet values it at a mere 22,000-crore. This makes the scam the biggest scam in Indian history.
(Leader of Opposition in Rajya Sabha <the Upper House of Parliament>, Arun) Jaitley also says the CBI probe is too little and too late. ‘‘The FIR filed by the CBI admits to a loss of Rs 22,000 crore. However, simple calculations yield a loss exceeding Rs 60,000 crore making it the biggest scam in India’s history.’’
To push through a policy of allowing more competition, the ministry under Raja’s jurisdiction in 2008 allowed new players to take telecom licenses at 2001 prices, which were way below the rates that could be fetched if market rates were determined in a normal bidding process.
“Earlier there was a belief that there should not be too many operators and so there was a cartel. I wanted competition and got the new operators in. It seems that the cartel has created the storm. There are allegations from them. Let the investigations happen,” Raja said.
He also said that even the empowered Group of Ministers (GoM) saw no reason to change the license fee. The GoM was headed by the current Finance Minister, Pranab Mukherjee which was constituted after the then Law Minister, H R Bhardwaj (in November 2007) had cautioned of a “mega scam” in making. The suggestion to set up a GoM had infuriated Raja who wrote a letter to the Prime Minister questioning the Law Minister’s suggestion.
The Telecom Minister’s letter is a classic example of arrogance. He wrote, “The Ministry of Law and Justice, instead of examining the legal tenability of these alternative procedures, suggested referring the matter to EGoM. Since generally new major policy decisions of a department or inter-departmental issues are referred to the GoM, and needless to say that the present issues relate to procedures, the suggestion of the Law Ministry is totally out of context.” (The emphasis is as in the letter.)
The PM seemed unimpressed about the letter and wrote back “I would request you to give urgent consideration to the issues being raised with a view to ensuring fairness and transparency and let me know of the position before you take any further action in this regard”. PM in his response also objected to the proposal to go ahead with the first-come-first-served model and cheap pricing. He instructed the Minister to adopt “correct pricing of spectrum and revision of entry fee”. Raja was also asked to respond to the objections raised by the Telecom Regulatory Authority of India (TRAI) over the first-come-first-served basis and the 2001 pricing for sale in 2008. This was followed up with a flurry of letter exchanges and then Raja went into a no-response mode for some time. After about 50 days he sent a letter to the PM on December 26, 2007 which stated that he had received the go ahead from Pranab Mukherjee (then External Affairs Minister) and the then Solicitor General Goolam Vahanvati.
It is here that the Telecom Minister got enlightened. “In these circumstances, the discussions with External Affairs Minister and Solicitor General of India have further enlightened me to take a pre-emptive and pro-active decision on these issues as per the guidelines and rules framed thereunder to avoid any further confusion and delay,” a grateful Raja stated.
The opposition has stepped up its attack on the minister in particular and the government in general. Some view this as an opportunity for the Indian National Congress, which leads the coalition government, to remove Raja who belongs to the DMK party. Raja has been in the line of fire from different quarters over the projects he sanctioned as Environment minister previously.
In Jaitley’s opinion, it is best that the PM allow the CBI to continue its investigation without hindrance by airing political messages. ‘‘It is not appropriate to interfere with the investigations of an independent agency in a matter where the entire nation believes that Raja and some of his officials are involved in massive largesse to select private companies.’’
As different groups squabble over the action; the CBI is believed to have recovered incriminating documents that may put the minister in a tight spot. Meanwhile even as the proceedings in the case are underway; acting on a strong worded letter from the the Finance Minister, DoT today issued timelines for 3G spectrum auction. There have been issues of contention between the various ministries and armed forces on the 3G spectrum allocation as these bandwidths are currently used by the armed forces and may not be available anytime soon.
The defence ministry has said that it will not be able to vacate the spectrum before June 2010. This had prompted some DoT officials to suggest that the auction should be delayed. As a result, DoT delayed the issue of the information memorandum which was supposed to be released earlier on September 29.
But Mukherjee, in his letter of October 15, made it clear that there was no scope for any delay in the auction, especially as the government wants the revenues from the auction to accrue in the current financial year. The government, in the Union Budget, had earmarked over Rs 35,000 crore from the auction of 3G auction, which is crucial if it wants to contain its fiscal deficit.