CAG report tabled; squarely indicts Raja

The report of the Comptroller and Auditor General of India (CAG) on the 2G spectrum scandal, tabled in both houses of Parliament today, strongly indicts former telecommunications minister A Raja for ignoring the advice of the prime minister as well as the finance and law ministries while allocating 2G spectrum to new players in 2008, causing a revenue loss of over Rs1.76 lakh crore to the government.

The CAG notes that the ministry of communications and information technology ''decided to go ahead with arbitrarily deciding that the cut-off date for issuance of letters of intent would be advanced to 25 September 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 and ''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 an 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 Department of Telecommunications (DoT) is untenable'' as the rejection of the advice of the law minister 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 report said the presumptive loss caused to the exchequer through spectrum allocation to 122 licence holders and 35 dual-technology licencees in 2007-08 was Rs1,76,645 crore. It pegged the figures on the basis of 3G auction held earlier this year, in which the government mopped up over Rs67,000 crore.