Tuesday, November 16, 2010

2G spectrum scam: Some highlights of CAG report

New Delhi:  The Comptroller and Auditor General (CAG) report on the allotment of 2G Spectrum licences, tabled in the Lok Sabha today, has held former Telecom Minister A Raja responsible on many fronts for violating guidelines, indulging in favouritism and costing the government Rs. 1.76 lakh crores by mishandling the allocation of the 2G spectrum in 2008. 

The report, bits of which had become known in the days before it was tabled, has the Opposition parties up in arms and demanding a joint parliamentary committee inquiry. Parliament has not functioned for a single day in the Winter session with the Opposition forcing adjournments.

The CAG report makes several damning conclusions about what Raja did incorrectly. On Tuesday afternoon, the auditor addressed a press conference to explain its report and to answer questions on it. Using power point presentation slides, CAG officials recounted the entire audit process and how it had reached its conclusions.   

Here are some highlights:

·         Raja ignored advice of PM, Law Ministry, Finance Ministry
·         Spectrum was rare national asset, should have been auctioned
·         Allocated 2G spectrum to new players at throwaway prices
·         Allocation of 2G spectrum led to loss of  Rs. 1.76 lakh crore
·         Calculation of loss based on 3G auction earlier this year
·         Cut-off date for license letters advanced arbitrarily by a week
·         This went against time-tested procedures of government functioning
·         Entire process lacked transparency
·         Undertaken in arbitrary and inequitable manner
·         Rules circumvented to benefit Swan:  CAG 
·         Reliance given spectrum ahead of others: CAG
·         Tata Teleservices among those who got undue benefits: CAG
·         Idea and Spice not given spectrum on grounds of proposed merger- this was against the rules
CAG on Prime Minister

'The PM had stressed on the need for a fair and transparent allocation of spectrum..... Brushing aside the advice, the Department of Telecom (DoT) in 2008 proceeded to issue licences for 2G spectrum at 2001 prices, flouting all rules and procedures'

'85 licenses were issued to companies which suppressed facts, disclosed incomplete information and submitted fictitious documents to DoT and thus used fraudulent means of getting licenses and thereby access to spectrum."

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