CAG report details Raja’s Rs 1.76 lakh crore scam
New Delhi: Government Tuesday tabled in Parliament the CAG report on 2G spectrum allocation, whose reported extracts have created a political storm and led to the resignation of Telecom Minister A Raja.
The report was placed in the Lok Sabha and Rajya Sabha amid uproar by the Opposition which demanded a Joint Parliamentary Committee probe into the alleged scam.
It was tabled in the Lower House by Minister of State for Finance S S Palanimanickam, who belongs to the DMK, and in the Upper House by his ministerial colleague Namo Narayan Meena.
Raja, who is a member of the Lok Sabha, was not present in the House when the report was tabled as soon as it reassembled at noon after an hour-long adjournment.
The report has pegged the revenue loss to the exchequer – based on auction held for 3G radiowaves- at Rs 1.76 lakh crore due to non-auctioning of the spectrum.
Questioning the entire procedure employed, the CAG noted that the ministry of communication and IT “decided to go ahead with arbitrarily deciding that the cut-off date for issuance of Letters of Intent would be advanced to September 25, 2007 and applications received would be decided on FCFS (first-come first-served) basis.”
In November, 2007, Prime Minister Manmohan Singh had written to the telecom ministry suggesting introduction of “transparent methodology” of auction, “revision of entry fee” in the “back drop of inadequate spectrum and large number of applications received for fresh licences.”
The CAG highlighted that the Law Ministry had suggested setting up of an Empowered Group of Ministers to discuss the large number of applications and spectrum pricing, but the telecom ministry rejected it saying “the need for forming and EGoM arises when a new policy is being framed and in this particular issue no new policy for grant of UASL (unified access service licences) was being framed.”
The auditor, however, said the “contention of the DoT is untenable as the rejection of the advice” of the Law Minister to have detailed deliberations on the issues in the EGoM on the ground that changes in policy might lead to litigation “goes against the well established and time-tested procedures of functioning of the government and the collective responsibility of the Union Cabinet.”
The report said the presumptive loss caused to the exchequer through spectrum allocation to 122 licencees and 35 dual technology licences in 2007-08 was Rs 1,76,645 crore. It pegged the figures on the basis of 3G auction held earlier this year in which the government mopped up over Rs 67,000 crore.
In the 77-page report, the CAG said the figure of the presumptive loss has been determined on the basis of various indicators like 3G auction and a price offered by an operator in 2007, besides scarcity value, nature of competition, business plans envisaged, number of operators and growth of sector.
The auditor pointed out that spectrum was allotted by DoT to the existing operators beyond the contracted limits (6.2 Mhz) without imposing any upfront charge for such allotment.
On the values determined through various indicators, the presumptive value of 2G spectrum on account of grant of 157 licences in different circles during 2007-08 would be in the range of approximately Rs 58,000 crore to Rs 1,52,038 crore.
The value of spectrum held by 13 operators for 51 circles based on the 2001 rates works out to be Rs 2,561 crore, while its value based on above indicators like 3G auction would be Rs 12,000-37,000 crore.
After the extracts of the report came out in the media last week, the Opposition launched a blistering attack on the government demanding Raja’s removal and a JPC probe.
Raja has maintained that he has done no wrong and distributed the licenses as per the policies followed by his predecessors since 1999.
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