The unprecedented telecom scam must be examined in the context of how corruption and its anatomy has changed in India during the economic boom of the last decade, fuelled as it were by a surge of western capital seeking higher returns from the land of the ?barbarians?. There used to be a certain innocence about the manner of corruption adopted by the political class in the pre-finance capital era. For instance, the 1990s images of a large suitcase packed with a crore rupees would appear somewhat primitive today. Post-finance capital, corruption or unlawful gains are at once notional and real, embedded in the ever-inflating values of companies that appropriate scarce resources like spectrum, energy, iron ore mines, coal, rare earths, etc.
The Comptroller and Auditor General (CAG) has therefore calculated the real/notional value of the 2G spectrum given away very cheap to some operators by the telecom minister, who resigned on Sunday protesting his innocence. Interestingly, immediately after resigning, the telecom minister A Raja claimed that during his tenure the teledensity had grown from 300 million to 650 million subscribers. Raja offered this piece of statistic as a measure of how his policies were successful. However, what was totally lost on the DMK minister was the fact that such massive growth in telecom over the past six years should have naturally entailed discovering the true value of spectrum through an auction periodically! But still he chose to give away spectrum in 2008 at prices discovered by auction seven years earlier.
The notional value of the loss calculated by the CAG by various methods goes up to Rs 1,70,000 crore. The Public Accounts Committee (PAC) of Parliament is examining the CAG report. The Opposition has demanded a Joint Parliamentary Committee (JPC), which must investigate in every detail the circumstances under which Raja gave away 2G spectrum so cheap.
Meanwhile, the Supreme Court too has got into the act by demanding an explanation from the Prime Minister?s Office as to why the CBI is delaying its investigation report on the spectrum scam. In an unprecedented act, the CBI had raided the department of telecommunication offices last year and seized a large number of documents relating to the spectrum allocation. Many key officials who had not cooperated with the telecom minister, and had even quit the government, have now spoken to the CBI and given evidence of what they thought was a highly irregular manner in which to allocate the precious resource for telecom connectivity. Some of those officials have even spoken openly to this newspaper about the whimsicality of the telecom minister.
So, as far as arbitrariness of policy is concerned, there is indeed an open and shut case against Raja. Therefore, there is no need for proof that Raja has indeed caused massive loss to the public exchequer by giving away spectrum so cheap to a few favoured firms, most of whom don?t even qualify as per the laid down entry criteria.
However, what needs to be proved by the CBI is criminal misconduct and receipt of bribes for favouring a few firms. This indeed is the hardest part of the ongoing investigation. No wonder the CBI, before raiding Raja?s offices, had registered the case against some ?unknown persons?. The CBI and other agencies have to track down the money trail, which historically is seen as the most difficult part of any investigation.
Global financial architecture and its offshoots such as tax havens make it well nigh impossible to track down the circuitous manner in which bribes are paid. In a startling revelation, the BJP leader Arun Shourie has claimed the CBI knows the ?identity? of the critical person who might have handled the bribe money.
One doesn?t know how seriously the CBI is pursuing the ?unknown persons? named in the first information report, but there are many leads waiting to be pursued by the investigating agency. One obvious trail that the agency needs to look at is how a company called Genex Exim Ventures quietly acquired shares worth Rs 380 crore in Swan Telecom, a major beneficiary of Raja?s spectrum largesse, just two months after Genex was incorporated with a paid-up capital of Rs 1 lakh. So Genex was a shell company created to be a shareholder of Swan.
Swan Telecom is now called Etisalat DB, which has links with Dubai firms whose promoters are reportedly close to the Karunanidhi family. Another partner in the Swan telecom project goes by the name of DB group, which has major real estate interests in Mumbai and other parts of western India. This group, too, is known to have major links with important politicians from Maharashtra.
The larger point, however, is A Raja is a mere symptom of a bigger disease that is grabbing a rapidly globalising India. Finance capitalism based on rising value of resources is creating easy money and unprecedented greed. It is the biggest challenge to India?s democratic institutions. Capitalism can prosper only if it is rule based and operates within a strong regulatory framework. If businesses start looking for quick money based on higher valuations and use the greed of the political class to achieve that end, the result is crony capitalism of the worst kind that will threaten every institution nurtured over the decades. The telecom episode is a timely reminder.
?mk.venu@expressindia.com