2G: CAG to defend loss estimate of Rs1.76 lakh cr before JPC today

The Comptroller and Auditor General of India Vinod Rai is due to make a crucial appearance today before the Joint Parliamentary Committee looking into the 2G spectrum allocation scam, where he is expected to explain how the CAG pegged the presumptive loss from the cheap sale of spectrum in 2008 at Rs1.76 lakh crore.

Rai's deposition assumes greater importance in view of the fact that his former lead auditor R P Singh has seriously disputed his senior's figures. Singh told the JPC on Monday that the loss was difficult to quantify, but in any case was not more than Rs2,645 crore - a fraction of the figure cited by Rai.

According to one report, Rai is expected to tell the JPC that it was R P Singh himself who first quantified the loss figure at Rs1.76 lakh crore.
 
The testimony of R P Singh has come as a booster shot for the government. Badly battered by the alleged swindle, it has maintained all along that the CAG's figure is highly exaggerated, and also does not take into account the social benefits from the rapid spread of mobile telephony. Singh's remarks also undermine the criminal case that the Central Bureau of Investigation is trying to make against former telecom minister A Raja and 13 others, who are on trial for the telecom scam.
 
The swindle rests on the premise that former telecom minister A Raja ignored advice to auction spectrum in 2008, and that he manipulated the rules to help some companies get out-of-turn licences. However, Singh today referred to the fact that both the union  cabinet and the Telecom Regulatory Authority of India (TRAI) had not recommended that second-generation or 2G frequency be auctioned. TRAI recently referred to this fact and warned the CBI that any losses would be presumptive and prone to error.

The government reluctantly agreed to form the Joint Parliamentary Committee or JPC in February this year at the opposition's insistence. The panel combines members from the ruling UPA and the opposition; they are assigned to fix accountability for the scam.

In May 2010, Singh, as then principal auditor and director general of post and telecommunication, reviewed the accounts for the government based on the sale of licences and airwaves by Raja in 2008. He said that "revenue optimisation" was not part of the original objectives of the audit.

According to NDTV, the final report submitted by Rai was made available to Singh for just 15 minutes. In an internal note dated 20 October 2010, deputy CAG Rekha Gupta is said to have told a junior that the report "is to be put up by tomorrow evening positively ... R P Singh has been asked to sign the last page," according to the NDTV report.

The JPC has asked Rai and Singh to depose separately after protests by UPA members. They say that given the fact that Singh was allegedly overruled by his boss, he should be given the chance to express his version of events freely.