Don't stop at Raja PDF Print E-mail
Tuesday, 16 November 2010 00:00
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Cancel the 2G licenses, get the bureaucrats involved, and give more powers to TRAI

Now that the government has finally done the right thing, and the opposition has won a major victory, it is important for both to pursue the matter to its logical conclusion, to get the licences back (how else will the government recover the lost Rs 1.76 lakh crore?) and to get the bureaucrats who colluded with Raja. It’s interesting how, in most cases, it is the politicians who get caught, not the bureaucrats who help them do the dirty.
A good first indicator of where things are going would be a PIL in the Supreme Court asking for the CBI to renew its investigation. The government’s affidavit, given last week, defended Raja and made all the arguments he’s been making so far — he was only following existing policy, and so on. So, if the government is serious about following things to their logical conclusion, it should ask for more time and present another affidavit. The affidavit, incidentally, the telecom secretary had confirmed, was cleared by either the solicitor general or the attorney general — among other things, the affidavit says the courts have, at best, a limited role in looking at “policy matters”.
What’s worse is that the officers who helped Raja are still around. The deputy director-general, access services, A.K. Srivastava, who was interrogated by the CBI for his role in issuing the licences, continues to remain in the same office. He is the person who formulated the note that the telecom ministry’s law officer and finally the law ministry cleared, to tell the CAG that it had no locus standi in investigating the case.
There is the far bigger scandal indicated by the CAG, that has little to do with the Raja protestations about following existing policy or about what’s called the first-come-first-served policy. The CAG has pointed out that 85 of the 122 licences issued were to firms that never even met the criterion specified by Raja’s own ministry. All companies submitted their applications by Octo-ber 1, 2007. Over 100 of them were knocked out on technical grounds, that is, their net worth was below what was required, their articles of association did not allow them to be in telecom, their shareholding pattern did not meet the requisite norms, and so on. Yet, 85 licences, including to companies like Unitech and Swan, were given despite this — clearly someone in the licensing division must have been in cahoots with Raja. In the case of Loop Telecom, the CAG says, an investigation would have revealed whether its shareholding pattern violated the law. The reason why these companies were allowed to get away with this, it is clear, had to do with the first-come-first-served policy — if they had taken, say two weeks, to get the paperwork in order, they would have lost their place in the queue for the spectrum.
It’s been almost three years, and a very large number of these firms have not rolled out their networks. Under the licence, they were supposed to do 10 per cent in the first year and all of it by the end of the third year. This is something the licensing division of the DoT should have been keeping tabs on, on a regular basis, to levy penalties going up to Rs 20 lakh per week for a delay of more than 26 weeks — in case of no roll-out, or big delays, the licenses were to be cancelled. So how come the paperwork never got done? Removing Raja is no solution, even if another DMK MP doesn’t come to warm the same seat, the concerned officials have to be removed.
Indeed, the CAG report on the fact that so many applications never met the minimum criterion, and the fact that there have been huge delays in rolling out the networks, is enough ground for the government to cancel these licences. Frankly, if the government does not get back the licences, it doesn’t stand any chance of being able to recover the Rs 1.76 lakh crore the CAG says it lost thanks to Raja’s actions. It has to get back the licences and auction them to telecom players and, depending upon how the market conditions are, either get back all the money it has lost or at least some part of it. Keep in mind that when Arun Shourie legalised Reliance
Infocomm’s wireless in local loop mobile phone and made them full-fledged mobile phones, he did so after charging the company around Rs 2,000 crore by way of additional licence fees and penalties.
Perhaps it’s time to do what the Planning Commission has been recommending for some time now: clean up the entire licensing system, not just for telecom, and hand it over to independent regulators who report directly to Parliament. Had this been done, for instance, any licence issued by the Telecom Regulatory Authority of India could automatically be reviewed by the courts (which does not happen when licences are issued by the ministry, unless as now, some serious corruption is alleged and, as the government affidavit says, the courts have limited jurisdiction in the matter). Had this been done, TRAI would also have levied penalties and even cancelled licences — right now, all it can do is to recommend this, leaving the final decision to the government.
Given the CBI’s complete lack of progress in the case for over a year, perhaps another good idea is to either get the CBI to report to the court or to set up an independent prosecutor’s office as in various countries in the West. Too many cases, and this could well be another one, fall by the wayside once the CBI gets involved.
For all journalists, PIL-types and the honourable few like former Telecom Secretary D.S. Mathur and Member-Finance Manju Madhavan (their stories were front-paged in this news-paper on November 13 and 15, respectively) who chose to stick to their guns, the message is: Keep it up!
The writer is opinion editor, ‘The Financial Express’ This e-mail address is being protected from spambots, you need JavaScript enabled to view it
Last Updated ( Sunday, 20 May 2012 06:02 )

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