The BJP-led National Democratic Alliance Government had to forego Rs 42,080 crore in 1999 while allowing telecom companies to migrate from a fixed licence fee to a revenue-sharing regime, according to the draft report of the Joint Parliamentary Committee on telecom.
The Committee said that the migration was offered to the operators even as cellular and basic telephone service operators did not honour their contractual obligations and defaulted in making payment of licence fee to the Government.
“Laxity shown by the Department of Telecom in taking action against defaulting licensees against blatant violations of contractual obligations and its failure to strictly enforce the terms and conditions of licence agreements at the initial stages resulted in mounting of licence fee dues,” the draft report stated.
The Committee noted that the Cellular Operators Association of India (COAI) had approached the DoT for grant of relief citing non-viability of cellular projects.
While considering the demands of the industry, it was felt by the DoT that the financial health of the cellular industry needed to be studied by an expert agency and further measures considered on the basis of its outcome.
The matter was then discussed in a review meeting taken by the then Prime Minister Atal Bihari Vajpayee on November 1, 1997 where it was felt that it would not be advisable to refer such a study to a private consultant and it was decided that the study be referred to Telecom Regulatory Authority of India (TRAI).
However, subsequently a decision was taken in a meeting taken by A.V. Gokak, the then Secretary, DoT on December 17, 1997 to entrust the study to some expert Government agency on the ground that TRAI could take longer time to complete the study.
“The Committee, therefore, concluded that the decision of the then Secretary to entrust the study to an agency other than TRAI, is tantamount to overruling his superior authority.
“Such a decision should not have been taken without the approval of the Minister of Communications and the Prime Minister’s Office,” the report said. On DoT’s decision to rope in ICICI to do the study, the Committee said that it was far from convinced to believe that impartial suggestions could be expected from ICICI who had direct interest in the matter, being the banker to those companies demanding concessions from the Department.
“The Committee’s apprehensions are further corroborated by the fact that the report which was submitted by ICICI to the DoT mostly contained recommendations which were in line with the concessions sought by the cellular operators,” the report said.