A political storm was set off today after the Joint Parliamentary Committee report on telecom gave a clean chit to Prime Minister Manmohan Singh for the 2G spectrum scam of 2008 and faulted the Department of Telecom for flaws in the various policy decisions taken from 1999 onwards.
The draft report of the committee, headed by Congress MP P. C. Chacko, also trashed the Comptroller and Auditor General’s allegation that the exchequer faced a presumptive loss of Rs 1.76-lakh crore as a result of the decision to allocate 2G spectrum on first-come first-served basis in 2008.
But the report said the BJP-led National Democratic Alliance Government in 1999 had to forego revenue of Rs 42,080 crore while allowing telecom companies to migrate from a fixed licence fee to annual revenue sharing model.
Terming the draft politically motivated, Opposition parties said the criticism of CAG was unprecedented. They also objected to the clean chit to the Prime Minister Manmohan Singh.
Acting in haste
“The Government of the day acted in haste by showing indulgence to the defaulting operators. The situation then was not so alarming that it warranted the operators to panic and approach the DoT repeatedly seeking relief,” the JPC report stated.
It blamed the NDA regime for initially deciding to adopt the first-come first-served policy in 2003. “The decision to adopt FCFS criteria for issue of licences was taken in undue haste and was not based on comprehensive deliberation.”
On the controversy around 2G spectrum allocation in 2008, the JPC puts the onus on the DoT and then Telecom Minister A. Raja. “Procedural infirmity has, no doubt, cast a cascading shadow on the decision-making process of the administrative ministry, which is highly deplorable,” it said.
“The Committee cannot but conclude that the evil design of implementation of the process of distribution of licences only corroborates to the extent to which FCFS criterion in essence got diluted and the established practices were violated.”
Prime Minister Manmohan Singh, it said, was misled about the procedure decided to be followed by the DoT. Further, the assurance given by Raja in all his correspondence with the Prime Minister to maintain full transparency in following established rules and procedures of the Department stood belied.
Attacking the allegations made by the CAG on the presumptive loss, the report said, “How the revenue realised in 2010 for 3G could be used for calculating the loss on account of 2G spectrum allocated as far back as in 2008, where the demand-supply position was also very different, is something that needs proper justification.”
The report said that the very concept of calculation of ‘presumptive’ loss in the context of allocation of licences and spectrum in a CAG report is misleading. “The Committee in hindsight could only wish that the figures projected in the report could have been more realistic deriving out of proven facts,” it said.
The JPC said it would uphold the prerogative of the Government in a welfare state to formulate policies which should under no circumstance be subjected to audit or calculation of loss. “By any standards, the benefits far outweigh any possible revenue forgone by the Government in the process of sustained policy intervention with the broad objective of increasing tele-density and maximising welfare of the people.”
Delay in licence issue
The report also brought out the flaws in a number of other decisions by the DoT, including what it termed the delays in giving licences to Dishnet (now Aircel). “A scrutiny of records made available to the Committee revealed that the manner of processing applications of Dishnet DSL Ltd for UAS Licences puts into question the probity of procedure followed by the DoT,” report said.
The Committee found delays at different stages including by the office of the then Minister of Communications and Information Technology Dayanidhi Maran in taking decision on the applications of the company. The matter is now being investigated by the CBI
On the decision to allow dual technology to Reliance Communications in 2007, the JPC report said granting ‘in-principle’ approval even before pronouncement of the policy in public domain was something unusual. Going forward, the JPC said the DoT needs to clean up its act and address a number of issues, including spectrum pricing and giving more power to the telecom regulator. However, it did not give any specific suggestions for achieving these objectives.