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The CAG highlighted the entire process of allocation of Unified Access Service licences "lacked transparency" and was undertaken in an "arbitrary, unfair and inequitable manner", in the process "flouting every canon of financial propriety, rules and procedures".
The 77-page report of the CAG tabled in Parliament said due diligence was not followed and even the recommendations of the telecom regulator TRAI were "not followed in spirit".
The report said the "presumptive" loss caused to the exchequer through spectrum allocation to 122 licensees and 35 dual technology licenses in 2007-08 was Rs 1,76,645 crore. It pegged the figures on the basis of the 3-G auction held earlier this year in which the government mopped up over Rs 67,000 crore.
It said there was an "imperative need to fix responsibility and enforce accountability for the lapses highlighted in the audit report."
Elaborating on the lapses and irregularities, the government auditor said Prime Minister Manmohan Singh had "stressed on the need for a fair and transparent allocation of spectrum" while the Ministry of Finance had sought for the decision regarding spectrum pricing to be considered by an EGoM (Empowered Group of Ministers).
"Brushing aside their concerns and advice, the Department of Telecommunications in 2008 proceeded to issue 122 new licenses for 2-G spectrum at 2001 prices, by flouting every canon of financial propriety, rules and procedures," the CAG said.
The DoT also did not do the requisite due diligence in the examination of the applications submitted for the licenses, leading to the grant of 85 out of 122 licenses to the "ineligible applicants" as all these firms did not have stipulated paid-up capital at the time of application.
Further 45 out of 85 licensees were issued to companies which failed to satisfy conditions of main object clause in the memorandum of Association (MoA), it said.
The CAG said the process of giving dual-technology licenses to leading telecom firms including Reliance Communications and Tata Teleservices "lacked transparency and fairness", and equal opportunity was denied to other similarly placed operators who could apply for use of dual technology only after formal announcement of the policy.
Noting that this approval (dual-technology use) had violated Cabinet decision of 2003 to allow additional spectrum at 2001 prices, the auditor said, "Deviation from a Cabinet decision should normally be with the approval of Cabinet. However, in the present case, such a crucial decision to permit service providers to offer access using combination of technologies (CDMA, GSM and/or any other) under the same licence with dual spectrum allocation was taken without the matter being referred to the Cabinet."
It said dual technology was introduced in October 2007 in a "hasty and arbitrary manner" and in-principle approval was given to three operators on a day prior to the announcement of the policy, which gave "the perception of discrimination against other players in the field".
The companies which got the licenses, were created barely months earlier and "deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means for getting licenses and thereby access to spectrum”.
"Onus of these licenses, obtained at unbelievably low price, have in turn sold significant stakes in their companies to Indian/foreign companies at high premium within a short period of time," the auditor said.
The premium earned by these "new entrants" to the telecom sector was nothing but the true value of the spectrum, which should have normally accrued to the public exchequer, "had the transparent and fair market mechanism been followed" for the allocation of these licenses, the CAG said.
In the report, 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 "backdrop of inadequate spectrum and large number of applications received for fresh licenses".
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 Law Minister's advice to have detailed deliberations on the issues in the EGoM “goes against the well established and time-tested procedures of functioning of the government and the collective responsibility of the Union Cabinet".
The CAG said the process of allotting unified access service licenses in January 2008 "lacked transparency and appeared to have been done with the objective of favouring a few firms over others".
As a result, it noted, Swan Telecom Pvt Ltd, which had submitted the application on March 2, 2007, was given the spectrum for the Delhi service area on August 28, 2008 itself.
In comparison, Spice Communications Ltd had submitted its application in August 2006, but has not yet been given (as on March 2010) spectrum for the Delhi service area, the report said.
Similarly, for Maharashtra service area also, Spice Communications Ltd applied on August 31, 2006 and got the spectrum in May 2009 while Unitech and Videocon got the spectrum much earlier in September 2008 though they had submitted their applications for UAS licenses more than a year later in September 2007, the CAG pointed out.
Idea Cellular Ltd applied for license on June 26, 2006 and got it in May 2009 while Unitech applied on September 24, 2007 and got spectrum in September 2008, it said.
The CAG said the "unusual haste, in spite of repeated concerns expressed by different agencies and by the senior officers within the Ministry raises doubts regarding the intention of the Honorable Minister of Communication and IT in going ahead with the issue of licenses in an arbitrary manner without letting the matter be debated or discussed and considered at appropriate levels.
"Thus the hasty actions taken by the DoT in the issue of new UAS licenses and the failure of the Ministry of Finance in prevailing on the DoT led to the 2-G spectrum being doled out at a price discovered seven years back."
The auditor found as "not tenable" the contention of the DoT about scarcity of spectrum, saying if its availability was the criteria for deciding the number of licenses to be issued, then fixing a cut-off date for issue of Letters of Intent had no relevance since the senior-most applicants, depending on their date of application, should have been the natural choice according to the FCFS criteria followed by the DoT.
Observing that level-playing field had been denied to the applicant companies, the CAG said the process of allotment of UAS licences in 2007-08 had "eroded the credibility of DoT".
The CAG said the TRAI, in August 2007, had recommended 'no cap' on the number of licenses in any service area but despite this recommendation, the DoT issued a press release on September 24, 2007 stating that applications for the issue of licences would be accepted only up to October 1, 2007.
"This action, in effect, conveyed fixation of artificial cap in the number of licenses to be awarded... It seems that the ministry by issuing the press release in advance in September 2007 had, in effect, circumvented the recommendation of TRAI by taking an action counter to the recommendation and its acceptance by DoT in October 2007.”
"To further compound the earlier decision of restricting consideration of applications received up to October 1, 2007, the DoT further advanced this date to restrict issuance of Letters of Intent only to applications received up to September 25, 2007. This was ostensibly to avoid legal implications in view of the shortage of spectrum for GSM services," the CAG said.
The report noted that in November 2007, the Prime Minister wrote to Raja and "expressed concern" that in the backdrop of the inadequate spectrum and the unprecedented number of applications received for fresh licenses, spectrum pricing, through a fair and transparent method of auction for revision of entry fee, which is currently benchmarked on an old figure, needs to be reconsidered.
This advice of the Prime Minister evoked an immediate response from the Telecom Minister, who on the same day, replied that the issue of auction of spectrum was considered by the TRAI and the Telecom Commission and it was not recommended by them as the existing license holders had already got spectrum up to 10 mega hertz per circle without any spectrum charge, the CAG said.
The Telecom Minister further said that his ministry had come to the conclusion that it will be "unfair, discriminatory, arbitrary and capricious" to auction spectrum to new applicants as it will not give them a level-playing field, the report noted.
The minister had "thus justified the allotment of spectrum to a few new operators in 2008 without reconsidering the old entry fee discovered in 2001, ignoring the advice of the Honorable Prime Minister," the CAG said.
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well all the regional parties and powerful chief ministers of major parties act with total lack of control and they behave like kings and queens. In state level there is no one to question them. Well when they migrate to Central they think they can get away easily like what they do locally. The lesson we have to learn is we need a national commission for probing corruption independently. The commissions task is to find any corruption at any level of governance and report that to Supreme court and follow-up with strict action independently. All parties when in opposition claim that ruling party is corrupt. But they never spell out what corrective measures they will take. In case of BJP it worst. They deny any allegations and court rulings on their ministers. They even rubbish CBI and Supreme court. It is for people to force this change. We dont trust BJP, CPI, AIADMK.....
This is absolute truth. We all know all are slave to fraud Gandhi. When they say Reliance or Tata befitted, that is absolute truth. We already know this. We do not need any proof. When they say Gaymohan is busy with mujra, we know this.
When Ramalingan Raju did fraud he was arrested and he is still in jail but in case of raja even PM is not able to take small action against him and he is freely enjoy and everyone just talk no action are taken against him ........resignation is not the solution he will come again after some time when people forget about this .....some hard action should be taken against him so that example will be set for other otherwise every one first do scam and than resign and enjoy the money(public) which they got in scam......so the situation is take action now or never ...........let us see who will win politics or truth
In this scam, just because the said Minister represents a regional party under the coalition regime, the government with its entity acted in an irresponsible way as if it is exonerated from the authority and responsibility in respect of issues connected with the same. It is to be noted that coalition is for not for simply forming a regime but for arriving at a consensus on issues with clear understanding for the purpose of establishing a regime. A coalition government is under an obligation to uphold the best of democratic practices at time of any threat or allegations to the same without weighing the bargaining power based on the strength of the number of members. Each and every party into the coalition was supposed to give this consent to the head of the government.
The 2G Spectrum scam must be a turning point to revamp the perception of a coalition regime in our political democracy. This scam should motivate our national parties to recondition its political dogmas by getting a prior assurance from the participating regional parties that in the event of any allegations of irregularities found on any ministries allocated to them and not heeding to the caution of the Prime Minister and other related ministries, the related ministers will be sacked without any preemptive right to negotiate with the coalition partners through their respective Party Heads.
The people of TN are very much aware about the first corruption scandal of those days viz.Veeranam water scheme,about Sarkaria Commission report and latest being SPECTRUM scandal by a DMK minister.Can one Raja alone can consume 1.70lakhs crores of INR.He is an instrument.The probable beneficieries are known to the public who are seeing TNpolitics for 4 decades.VIRUS WAS INJECTED IN TN politics 40 years ago.Now it has spread to whole body politics .Time has come to burn the CORPUs to avoid spreading to other lives.WILL IT HAPPEN FOR GOOD?
The CAG needs to be investigated . Somebody is pulling strings.
The Comptroller Auditor General has submitted its report in regard to 2 G spectrum allocation and the Nation has faced revenue Loss of 1.76 Lack Crores . As it is a matter of suprise that the loss of revenue to the Union Government has effected the development of works to be carried out for the rural areas . If the Union Government would have ignored the private players in allocation and the amount as described by C.A.G. would have been fetched , it would have been used for the Nation Building , Education and providing basic civic amenities in rural areas . It is not a matter that Union Minister A .raja has resigned or not ? It is a matter that Why the Government exchequer had to face a Deficit burden of 1.76 Lack Crores .
Bottom of Pyramid: NREGA: small corruption At Village & Block Level,Middle Level: District & Municipality: Adarsh Scam- so many Taj, Vijayan, Yeddy the great... Top Level: CWG, Mining, Koda,Defence, Ordanance Factory, Top Most: 2 G scam.... No No wait for 4G Scam..... Who will catch to whom
Forbes must revise its list of powerful people, at least from India. Silence and inaction of PM is rightly questioned by Hon'ble SC today. Raja, his family and his team will enjoy the loot for next 50 years when matter will be lingering in various courts. Youths are enticed to such business of loot which requires no education or hard work, except some political bosses and rarest chance to get punished or refund of loot.
We are enjoying the cheap calls and the Mobile in booming in India due to Raja thanks, again. If the spectrum was sold at higher rates the call rates and mobile telephony would have been costly see 3G for example we are talking of 69 Rs per minute call. Also the money GOI get from Auctions goes into politicians pockets one way or the other.
WE ARE COMING ACROSS THE NEWS OF SCAM IN 2G SPECTRUM DISTRIBUTIONS FOR A LONG TIME. AFTER READING THE OBSERVATIONS OF THE CAG AND THE NEWS IN THE PAPER(TOI) IT APPEARS THAT IT IS NOT THE PRIME MINISTER OR THE CABINET OF THE MINISTERS THAT RULES BUT IT IS THE WHIMS AND FANCIES OF A MISNISTER OF UPA GOVERNMENT (TAKEN FROM DMK) WHICH PREVAILS/PREVAILED. WHY TO BLAME THE HAPLESS P.M., EVEN THE MOST POWERFUL CONGRESS HIGH COMMAND SEEMED TO BE QUITE POWER LESS BEFORE THE DMK- AS IS QUITE OBIOUS FROM THE TIME TAKEN TO REMOVE RAJA FROM THE MINISTRY. RAJA COULD NOT BE REMOVED TILL THE DMK BOSS CONCURRED, THOUGH VERY RELUCTA NTLY. WHO IS RULING? NORMALLY THE MINISTER STAYS IN THE CABINET BY THE GRACE OF THE P.M. BUT IN THE PRESENT CASE IT APPEARED TO BE THE OTHERWAY ROUND. WE MAY REASONABLY ASSUME THAT IN THE PRESENT ESTABLISHMENT EVERY MINISTER, BEAUROCARAT OR ANY FUNCTIONARY HAS THE LIBERTY TO LOOT THE COUNTRY- WHETHER IT BE 2G SPECTRUM, CWG ORGANISATION,35 STOREYED BUUILDING IN MUMBAI.
While the CAG report reveals that Tata was one of the beneficieries of the scam Ratan Tata has the audacity to claim that years back some minister sought bribe from him which he says he refused. If we blame Raja for giving undue favour to some companies does it not point a finger towards Tata as well? It is no secret that all big business houses enjoy fruits of such largesses on quid pro quo formula.
Raja became so powerfull as most of ministers were share holder of the loot and nobody wanted to stop him. Our PM is honest person and not power hugry then why he did not vacated the chair,to under stand, you have to read between line.
Greater crime is being commited by remaining silent after being aware that Crime has been comitted. It is equivalent to abetting to the crime.
With the sacking of Raja the entire drama should not end.Where went all the money. It should be traced and retrieved back or the licences should be cancelled immediately and the beneficiary will be cornered automatically. If Raja's resignation will end the drama then in every government this type of loot will follow and a scape goat will be sacked to the benefit of all political parties. Even in small department tenders there is no provision for first come and first served basis [ nomination]. How can they issue licences in such values [ more than 1500 crores] without due publicity and auction. It is a shame to the politicians of India. The entire UPA government should resign for this. Abdul kalam dasan
U r living in Heaven. This is India. Money will not come back. Guilty will roam freely and nothing will happen to them. Media and people are emotional fools to believe that India will have strict law for corruption and proper implementation. Loot is there in every government. we can see Raja only. Who knows who i behind him? May be DMK, Sonia's party is in alliance to gulp 1.76 crore. What happened to Madhu Koda ? He is living lavishl after some cases by CBI.
UPA govt in centre and states are surounded by scams may be CWG, ADHRSH? 2G spectrum and many more.On the other hand they have failed in checking price rise,Terrors, naxals activities crime in Delhi and what not? To divert attention of public their leaders start talkig about BJP ,minority,NAREGA and other problems.People of India are fedup of such things.There must be some limit to loot mar and curruption. Where public of this country go. With public money they are increasing their bank balance in Swiss banks .As per Director of Swiss bank " Indians are poor but India is not a poor country.He says that " 280 lac crores of Inian money is deposited in SWISS BANK by rich politicians" which can be used for taxless budget for 30 years. Can give 60 crore jobs for Indians.This can help create from any remot village to Delhi 4 lane roads. For free power supply to more than 500 social projects. Every citizen can get monthly Rs. 2000/ for 60 years. No neeed for world bank& IMF loan.
Cag says Raja ignored PM. Public and Opposion saying so for over two years,Sonia,PM and media ignored it till now. Who is how much guilty ? n krishana has brought out a new news that- Sonia's poor mason family is now richest billionarie family of $2.7 billion and is next only to the Fiat family of Italy.
Where the mind is without fear - of consequences And the head is always thinking of the next opportunity to amass wealth through unfair means Where Public Funds are freely available for misappropriation Where the country is blessed with leaders who are cheats Where morality has been compromised with graft and corruption extending to unimaginable levels Where lies come out without any hesitation or shame Where tireless striving stretches its arm towards corruption and immorality Where the clear stream of reason no longer exists and the only thing which remains is suppression of the weak by the powerful Where the fear of God and the spirit of goodness have been lost and thoughts are trained only towards the objective of abetting corruption Where the poor and the downtrodden are ignored and the leaders feast on the taxes paid by ordinary citizens From this Hell of Endemic Corruption, My Father, I Pray, Save my Beloved Country
We Indian are paying the price for the Evil side of democracy. The sprit behind which our forefathers fought for the freedom of the country and the cause for which our Mahatma advocated the Similicity in life has vanished. We are having most Brilliant and one of the top Economist as our Prime Minister. But it is one of the Worst period of Political Corruption we are passing through. NOw , I feel it is the responsibility of the our Learned Legal personalities and Our Press to bring all the culprits to the book. Immediate steps for recovery of the dues to be made . What ever licences granted for the wrong person should be cancelled by a stroke of presidential ordinance. Oh, our Press people now it is your responsibility to bring the real culprits to book.
must have washed his conscience with RIN.
When the PM himself gave him authority to loot knowing fully well what was going on. Likewise he didn't know for Commonwealth Games till last momemt. I say 'Ignorance is Bliss' in my country.
This looting of Karunanidhi family is known to everyone; PM and other minsters warned but never cared. They were keep looting and swindle it. PM or Chidambaram not in a position to control them. Even PC might get some benefits. PM didn't have any power to stop them, since they have great support from Sonia. When Prnab become FM, he didn't allowed them and 3G auction controlled by him after repeated warning failed. Karuna family enjoyed the relationship with Sonia and never bother about other guyz who little bother about corruption
Well Again a prime example shown to all of us that now a days politicians aka crook aka thug are looting the hard earned money of all people without any fear and with so confidence. This UPA Government who hails to be secular has again showed after CWG that they are the epicentre of corruption in the country. They are not more than Dalal or Agent who act only for commission.
UPA Governement made money and improved their personal financial background.Public life becomes Big question mark.Better we have to wash out the UPA Govt