Denies allegations that it overruled audit official's figures

The office of the Comptroller and Auditor-General (CAG) on Thursday rejected allegations that it discouraged the former Director-General, Audit (Post and Telecommunications), R.P. Singh, on his work in the 2G spectrum report, and justified the quantum of presumptive loss of Rs. 1.76 lakh crore as based on certain market indicators of spectrum value.

Reacting to the reports that Mr. Singh had computed lower figures of loss and that his figure of Rs. 2,645 crore was overruled, the CAG, in a detailed reply to the Public Accounts Committee (PAC) that is looking into the issue, said, “There is no question of the CAG wanting to prevent DG (P and T) from obtaining comments from the DoT [Department of Telecom]. It is part of audit procedure to obtain response from the department and consider the same before finalising the report.”

On the suggestion that CAG Vinod Rai discouraged Mr. Singh from seeking comments from the DoT which he wanted to include in the final report, the CAG office said there was no question of preventing the DG, Audit, from taking such a step.

It said the draft report was issued to the DoT on July 19 by Mr. Singh and its response was received on July 27 and August 31, 2010. On the reason behind the government auditor choosing to calculate the presumptive loss at Rs. 1.76 lakh crore, based on 3G auction prices, the CAG said audit tries to work out loss in all such cases where documentary evidence suggest a possible loss or wastage. “Since certain indicators of market perception of the value that spectrum commanded in the later part of the decade was available, audit attempted to calculate the presumptive loss as per those indicators.”

The CAG also explained that the spectrum value of Rs. 1,658 crore in 2001 was arrived at in a bidding process. The procedure followed in 2008 was first-come first-served, which was an internal principle followed by the DoT not approved by the Cabinet. In 2010 too, the 3G prices were arrived at through auction. Hence the decision was taken to assess the quantum of loss in 2008, which was in deviation of the procedure followed in 2001 and 2010.

Reacting to suggestions from some Congress members at the PAC meetings that Mr. Rai overruled the report of Mr. Singh, who had put the loss at Rs. 2,645 crore on the basis of inflation cost, the CAG said the first draft reportedly prepared by the Delhi branch office of the DG (P and T) on April 20, 2010 carried a figure of Rs. 48,374 crore as loss on account of allotment of spectrum to 122 licences issued by the DoT. The report was re-drafted by Mr. Singh, who calculated possible figures of loss, using three methods, and forwarded to the CAG's office on May 31, 2010.

The CAG said the figure of Rs. 65,725 crore was worked out on the basis of the offer made by S Tel. But the office of the DG (P and T) felt the figure was invalid as S Tel had withdrawn the offer in the High Court.

“The Rs. 1,39,229 crore based on 3G auction rates was worked out, of which loss of Rs. 36,729 crore, calculated on the total additional 2G spectrum beyond 6.2MHz spectrum allocated to the operators, was included in the report,” the CAG said.

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