It wasn?t just the ministries of finance and law that A Raja side-stepped in the rush to allocate spectrum to nine companies in 2008. The CAG report details how the telecom minister disregarded advice even from his own dissenting officials, whom he said ?did not possess up-to-date knowledge” and “were attempting to confuse issues.?
The report submitted by the Comptroller and Auditor General chronicles the events leading up to spectrum scam, which have earlier been brought to light in a series of reports in FE. As is known, Raja?s largesse cost the exchequer Rs 1.76 lakh crore, with the government getting a meagre Rs 9,000 crore.
?Policies are evolved through the initiatives of the ministries. The response of the ministry (Raja) suggested that the ministry (Raja) was insensitive to the changes in the sector and the economic value 2G spectrum commanded in the market when it decided not to review the pricing of spectrum,? CAG has observed in its report. It goes on to add: ?Trai also had observed that value of spectrum needs to be reassessed through a market mechanism. The claim that decisions were taken after due process of consultation was not tenable since the communications with the ministry of finance, ministry of law and justice were more in the nature of the actions of the ministry (Raja) than consultation by way of obtaining their views?.
The bone of contention was the price at which the licences bundled with spectrum be granted. While the finance ministry wanted the price (Rs 1,651 crore) for the pan-India licence last discovered through auctions in 2001 be revised, Raja wanted to stick to it. The law ministry?s views were that there should be a larger discussion on the subject by an empowered group of ministers (eGoM).
Highlighting how the decision to allocate the licences was taken unilaterally by Raja at the price desired by him by deliberately keeping the finance ministry out of the loop, CAG has observed: ?The ministry of finance was insisting on the issue of the inclusion of spectrum pricing in the terms of reference of GoM constituted for spectrum vacation. In June 2007, the finance secretary had informed DoT that the matter had been discussed at the level of finance minister and it was felt that a sound policy on spectrum pricing was required. The finance ministry again in November 2007 questioned the sanctity of continuing with a price determined way back in 2001 without any indexation or current valuation and sought review of the matter. Agreeing with finance ministry?s views, member, finance of the DoT had also sought an in-depth analysis of the issue prior to taking any further action to which the then DoT secretary (DS Mathur) also concurred.?
However, an adamant Raja quoting a four-year old Cabinet decision of 2003 justified to the finance ministry that it was authorised to calculate the entry fee for licences depending on the date of payment, on the principles of Trai recommendations of 2003 and of 2007. ?The telecom minister insisted that the matter of entry fee was deliberated in the department, several times in the light of various guidelines issued by the department and recommendations of Trai and accordingly, a decision was taken that entry fee need not be revised. Suggestions from DoT officers for detailed analysis of the issue were also ignored maintaining the view that the officers did not possess up-to-date knowledge of the universal access service licence guidelines and were attempting to confuse issues. The action suggested that the telecom minister was not open to the idea of discussing and deliberating the issues involved at appropriate levels,? the CAG report has observed.
The law ministry’s views for constituting an eGoM were brushed aside by Raja on the grounds that the matter fell under the purview of his ministry and did not require any consultation in GoM/Cabinet. The CAG has highlighted the response of the DoT: ?It was wrong to perceive that any matter which is placed before the law ministry for taking legal advice and not accepted by the concerned ministry, is to be placed before the GoM or the Cabinet.?
?From the correspondences between the DoT secretary and finance secretary, it was evident that there was a difference of opinion amongst the finance ministry, the law ministry and the telecom minister on the procedures and priorities to be adopted in the processing of the huge number of applications. A prudent decision would have been to go by the advice of law ministry on the issue of legal tenability and to discuss threadbare the various issues involved in issue of new licences at an inter-ministerial forum,? the CAG has concluded.