Sibal acknowledges Rajas scam, finally

Written by Rishi Raj | New Delhi | Updated: Jan 31 2011, 07:29am hrs
Through the new policy announced over the last weekend, telecom minister Kapil Sibal tacitly acknowledged the irregular allocation of spectrum by his predecessor.

The new telecom policy (NTP 2011) de-links licences from spectrum, calls for a market-determined price for all future allocation of spectrum and establishes the governments supremacy in policy making over any recommendations of the Telecom Regulatory Authority of India (Trai).

While Sibal deserves accolades for cleaning the telecom mess and putting in place a clear road map for the future, the bad news for the government is that his NTP clearly brings to the fore all the wrongs done by Raja and shreds into pieces the governments defence of the tainted former minister in the Supreme Court. Sibal also unwittingly exposed the fallacy of his defence of Rajas actions earlier on the ground that auctions were not feasible in 2007-08 since the Trai had not recommended for the same. It also disproves the government's earlier stance that auctions are not good as the objective of the policy anyway was not to maximize revenue, but to bring about socio-economic gains.

Finally, with his assertion that all future spectrum allocations will be through a market-determined price, Sibal has acknowledged that the country has come to a stage where socio-economic gains have been achieved and the best way forward is through a transparent market-based mechanism rather than any self-serving mechanism which serves as a cover for achieving socio-economic gains.

Theres nothing which Sibal announced on the weekend which Raja could not have done in 2007. Lets examine how. While announcing the delinking of the spectrum from licence and making all future spectrum allocations to a market-linked mechanism, Sibal has prevailed on the Trai recommendations of May 11, 2010. What did the Trai recommendations of May 11, 2010 say That auctions are not feasible; that all operators be given spectrum up to 6.2 Mhz without any extra charge as the licence condition permits that and charge incumbent operators for holding excess spectrum beyond the permissible 6.2 Mhz.

Now lets see what Sibal has done. He has departed from the recommendations. He has acknowledged that auctions or any similar alternate mechanism is the best way to grant spectrum so that government revenues are maximised. He has also trashed Trais stand that government can only charge a market fee for spectrum beyond the 6.2 Mhz threshold by stating that government has the right to change policy.

In effect, he has clearly established the fact that while the Trai has the right to recommend, its the government which finally decides on policies.

The same luxury was available to Raja in 2007 and heres where the governments defence in the SC will fall hollow and Sibals acknowledgment of Rajas scam comes. Rajas defence all along has been (and now the governments affidavit in Supreme Court) that Trai did not recommend auctions so how could it have done so Sibal clearly establishes that Raja had the option to reject the regulators recommendation and move ahead with a market-determined price but he did not do so, which clearly establishes his nefarious links with the ones whom he finally granted licences in January 2008.And finally, by demolishing Raja, Sibal has also demolished his earlier claims debunking the Comptroller and Auditor Generals report that there was no loss due to Rajas largesse.

His move towards market-determined spectrum pricing clearly establishes the loss, however the amount may vary.