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Friday, 23 September 2011 00:00
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Although the finance ministry letter ‘seen’ by finance minister Pranab Mukherjee appears to put all the blame for not averting the A Raja scam at the doors of the then finance minister P Chidambaram, this does seem more than a bit one-sided. It wasn’t just Chidambaram who was in the know, many others in the top leadership, from the PM to the external affairs minister (then Pranab Mukherjee) and even the Cabinet Secretary, were very much in the loop. While the finance ministry letter made public by Subramanian Swamy has caused a huge furore, the finance ministry’s obvious failure to prevent the bargain-basement sale of licences was made public many months ago when the Public Accounts Committee (PAC) asked RBI Governor D Subbarao why he failed to insist on the auctioning of the spectrum when he was finance secretary—more so since he had written several letters to the telecom ministry and the Cabinet Secretary on the matter. Subbarao’s explanation to the PAC was that he had got involved in the budget-making exercise and so could not follow up.

Central to the entire scam is the refusal of A Raja to allow the Group of Ministers (GoM) to decide on the pricing of new licences, and even the law minister had advised him to do so. The finance ministry note even details this and says that a GoM was constituted on spectrum pricing on February 23, 2006. At this point, the GoM had the powers to decide on spectrum pricing. When Raja’s predecessor Dayanidhi Maran wanted this removed, this was done. Which is why, on March 28, 2007, Subbarao asked the telecom ministry to bring this back to the GoM. Since the telecom ministry didn’t agree, Subbarao wrote to the Cabinet Secretary, who asked the two ministries to sort out the matter while keeping the Cabinet Secretariat in the loop. This didn’t happen, and Subbarao never followed up. All of this shows the finance ministry in a bad light, including the minutes of the January 30, 2008, meeting where Subbarao states: “FM said that for now we are not seeking to revisit the current regimes for entry fee or revenue share.” But the critical question here is why the head of the GoM did not pursue this matter? Instead, as Raja put it in a letter to the PM on December 26, 2007, “the discussions with the External Affairs Minister and Solicitor General of India have further enlightened me to take a pre-emptive and pro-active decision on these issues …” The PM acknowledged this letter without any questions.

A month prior to this, on November 2, 2007, Raja wrote two letters to the PM, saying that though he had a cut-off date of October 1, 2007, for accepting applications for new licences, he planned to process the applications received till September 25 first; in reply to the PM’s suggesting that an auction could be looked at, Raja said this would be “unfair, discriminatory, arbitrary and capricious”. Blaming Chidambaram is all very well, but there was a collective failure here.

Last Updated ( Friday, 25 November 2011 10:40 )
 

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