Cabinet Decision Vindicates CAG ; Nation And The CAG Deserve An Apology From The Telecom Minister

I have been warning the Government about the Telecom Minister Mr. Kapil Sibal’s misleading the nation by making statement of zero loss in 2G Scam and ridiculing the CAG for indicating a loss to the national exchequer arising out of the 2G spectrum scam – whose highest estimate, based on 3G auctions, was fixed at Rs. 1.76 lakh crores. Now, with the Union Cabinet deciding a Rs. 14,000 reserve (base) price for 5 MHz of 2G spectrum in the 1800 MHz band, it has become clear that the Telecom Minister had misled the nation made derogatory comments in violation of Rule 1.12 of the Parliamentary Procedures and Practices which prohibits any official or any Member of Parliament to comment on any subject which is under the consideration of the PAC, not only about the findings of the CAG, but also the methodology that they had adopted in arriving at the loss estimates.

I had provided a detailed rebuttal of the Telecom Minister’s contention and statements to demolish the CAG’s painstaking calculations. Quite apart from the fact that the value of the 2G spectrum is firmly established by the Cabinet, it is clear that every claim that Mr. Sibal had made in his much criticized and certainly unsubstantiated press release has come to naught, and in fact, the series of events since then prove that the CAG, and those who stood up to defend the CAG, were on the right side of the arguments.

In his justification of the “zero loss” theory, the Telecom Minister had said that consumer affordability through low tariffs and a bid to maximize public welfare was the primary driving factor behind allocating 2G spectrums in 2008 at 2001 prices. He further claimed that these measures have helped increase teledensity and reduce prices of mobile services for the ‘aam aadmi’.

Clearly, his statements are not borne out by the facts. Apart from the fact that the companies which had entered into a criminal conspiracy with former Telecom Minister have been accused of violating rollout obligations in their licenses (negligible increase in teledensity wherein the 122 licensees are concerned), nothing has changed for the Government to have now altered its logic. Clearly, both the TRAI and the Cabinet, in its wisdom, have rejected the proposition made by the Telecom Minister – linking spectrum auction / bid price to affordability.

The other argument that was advanced by the Telecom Minister in defending the indefensible 2G scam related to the fact that the CAG had erred by comparing 3G spectrum with 2G. Clearly, this flawed reasoning has also fallen flat. Not only is the current reserve price decided by the Cabinet for 2G spectrum (and not 3G), but is in fact for the exact same spectrum that will now be reallocated through a transparent auction process under the guidance and directions of the Hon’ble Supreme Court.

Telecom Minister’s third claim to defend the former Telecom Minister illegal actions was that the Government had followed the TRAI’s recommendations, by stating – “The recommendations of the independent regulator are a very high, important factor in deciding these matters.” He did so by knowing full well as a lawyer that the TRAI’s recommendations are not binding on the Government. Now, in a twist of fate, not only has the Government reduced Rs. 4,100 crores per 5 MHz slot vis-à-vis the TRAI’s recommendations, but has, in fact, done so without giving any explanation for their reasons. The exact same sovereign right of the Government could have been invoked and the TRAI’s recommendations referred back for reconsideration – consistent with multiple letters from the TRAI in this regard, and the 2G spectrum scam could have been avoided.

The Telecom Minister also attempted to question the CAG’s rigour by highlighting the time gap between 3G spectrum auctions and the 2G allocation by the former Telecom Minister thereby challenging the methodology adopted by the CAG. The Cabinet has shown that for approximately the exact same amount, band, and use of spectrum – nearly five years later – the base price has been set up at Rs.14,000 crores. Further, even if a penny is not paid over the reserve price, the Government would recover – five years later – for the amount of spectrum allocated by the former MoCIT, a sum of Rs. 1.47 lakh crores.

During his attack at the CAG which stunned the nation; Mr. Sibal had used very strong language questioning the methodology adopted by the CAG in coming to a figure Rs. 1.76 lakh crores calling it utterly erroneous and claimed it had embarrassed the Government and the country. The events since the Telecom Minister’s unfortunate attack on the CAG, especially the Cabinet decision on reserve price, shows that the CAG has been faulted for nothing.

Much water has flowed under this bridge, and it’s time to show the courage of introspection and respectfully accept his mistake and apologise to CAG and to the nation. Such as apology will restore the public’s confidence in the fact that the unprecedented attacks on one of our greatest institutions was were an exception to the rule – an aberration – which is duly regretted.

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