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Updated: December 20, 2011 09:22 IST

New licensees were favoured at the cost of exchequer: CAG

Sandeep Joshi
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Comptroller and Auditor-General Vinod Rai on Monday defended before the JPC the CAG's findings on revenue loss in the 2G spectrum allocation in 2008. File photo
The Hindu Comptroller and Auditor-General Vinod Rai on Monday defended before the JPC the CAG's findings on revenue loss in the 2G spectrum allocation in 2008. File photo

At JPC, Manish Tewari asks him about the basis of reaching the loss figure

Comptroller and Auditor-General Vinod Rai on Monday defended before the Joint Parliamentary Committee the CAG's findings on revenue loss in the 2G spectrum allocation in 2008. He also said it was “not abnormal” for officers in the organisation to differ on various issues, including the pricing formula.

“The value which should have accrued to the public exchequer [from auction of 2G spectrum] went as a favour to new licensees in the form of huge capital infusion for enriching their business,” Mr. Rai reiterated at the hearing, which remained inconclusive.

In its report, the CAG had put the “presumptive loss” due to the allocation of scarce spectrum at between Rs. 57,000 crore and Rs.1.76-lakh crore (based on various theories).

According to informed sources, the CAG, who was questioned by Congress MP Manish Tewari, explained various basics for calculation of loss that included draft reports prepared by the Director-General (Post & Telegraph) and also infusion of capital by foreign companies into the newly-formed telecom firms which got licences in 2008.

While clarifying on the DG (P&T) draft report, where the loss was put at just Rs.2,645 crore based on the figure of Rs.1,651 crore (for a pan-India licence) and enhanced at the rate of cost inflation index of 2008 as against the 2001 prices, Mr. Rai pointed out that even the Finance Ministry said the pricing model was “not acceptable” and also that “the present regime of allotting spectrum free of charge fails to capture its scarcity value, yield monopoly results to operations and is clearly inefficient.”

The sources said Mr. Tewari asked Mr. Rai mainly about the basis of reaching the loss figure and why the lesser figures as mentioned by DG (P&T) were not considered.

This was the second time Mr. Rai appeared before the JPC, the earlier occasion being on November 15. The CAG will appear before the committee again on Tuesday when other MPs are likely to seek clarifications.

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It is not clarification but obfuscation.
Read this:
"While clarifying on the DG (P&T) draft report, where the loss was put at just Rs.2,645 crore based on the figure of Rs.1,651 crore (for a pan-India licence) and enhanced at the rate of cost inflation index of 2008 as against the 2001 prices, Mr. Rai pointed out that even the Finance Ministry said the pricing model was “not acceptable” and also that “the present regime of allotting spectrum free of charge fails to capture its scarcity value, yield monopoly results to operations and is clearly inefficient.”

Can someone put all this mumbo-jumbo into comprehensible, simple
prose?

from:  Ven Sardi
Posted on: Dec 21, 2011 at 04:41 IST

I fully agree with Mr. VMN Sharma and his observations. JPC led by Congress is after CAG only to prove that he is wrong and the Great Mr. Kapil Sibal is right, who is contradicting even DG(P&T)'s draft report and say that there was zero loss to the exchequer. If we eliminate Congress from the governance of the country, India will prosper to a very great extent.Will that day ever come?

from:  nrshyam.
Posted on: Dec 20, 2011 at 22:32 IST

While CAG appearing before the JPC is a normal process, his multiple depositions on justifying the quantum of the loss will be considered abnormal by the people. It will appear that the JPC is all about proving Mr Sibal right. People of the country have more trust in the CAG now than in the politicians. Instead of traversing this course, the politicians would better work on cleaning the scourge they have pushed the country into.

from:  VMN Sharma
Posted on: Dec 20, 2011 at 10:59 IST
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