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Updated: October 20, 2013 18:51 IST

‘PM ignored note to hike 2G entry fee to Rs. 36,000 crore’

Shalini Singh
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Former Cabinet Secretary K.M. Chandrashekhar’s shocking revelation on Thursday to the JPC investigating the 2G scam that Prime Minister Manmohan Singh had ignored his recommendation that an entry fee of Rs. 36,000 crore be charged for spectrum, has brought the ghost of the 2G scam back to PM's doorstep. File photo
The Hindu Former Cabinet Secretary K.M. Chandrashekhar’s shocking revelation on Thursday to the JPC investigating the 2G scam that Prime Minister Manmohan Singh had ignored his recommendation that an entry fee of Rs. 36,000 crore be charged for spectrum, has brought the ghost of the 2G scam back to PM's doorstep. File photo

Former Cabinet Secretary Chandrashekhar deposes before JPC

The former Cabinet Secretary, K.M. Chandrashekhar’s shocking revelation on Thursday to the Joint Parliamentary Committee (JPC) investigating the 2G scam that Prime Minister Manmohan Singh had ignored his recommendation that an entry fee of Rs. 36,000 crore be charged for spectrum, has brought the ghost of the 2G scam back to the Prime Minister’s doorstep.

Mr. Chandrashekhar’s disclosure that he had submitted a note recommending a huge upward revision in the existing price of Rs. 1,651 crore for pan-India spectrum that had been discovered at 2001 rates, was in response to CPI leader Gurudas Dasgupta’s persistent questioning about the failure of the Cabinet Secretariat to act on a matter which had such huge financial implications for the country. Mr. Dasgupta’s relentless and well-researched questioning of witnesses has yielded unexpected dividends.

5 weeks before 2G scam

According to Mr. Chandrashekhar, the note was submitted on December 4, 2007. More importantly, it was not written suo motu, but submitted in response to a specific enquiry made by the Prime Minister regarding the financial implications of the allocation of scarce 2G spectrum at the 2001 price. Mr. Chandrashekhar explained that his recommendation for a staggering increase in spectrum price was based among other things, on the size of the market, the improvement in teledensity and the fact that demand had exceeded supply which was reflected through a long queue of 575 applicants for the licence. However, Dr. Singh never responded to his note.

The timing of this note reveals that had the Prime Minister acted upon Mr. Chandrashekhar’s advice, the government could have easily prevented the scam, since this note was dated 5 weeks before the scam took place on January 10, 2008.

PM’s silence

Dr. Singh’s silence on the matter is particularly inexplicable considering that Mr. Chandrashekhar’s note was consistent with his own letter of November 2, 2007 to ex-Telecom Minister A. Raja, seeking either auctions — where legally possible — or an increase in the entry fee. Mr. Raja had replied to Dr. Singh’s letter on the same day, refusing to either auction the spectrum or enhance the entry fee.

Subsequently, the then Finance Secretary Dr. Subbarao wrote to the Department of Telecom on November 22, 2007, again questioning the allocation of spectrum at 2001 rates, and directing a stay on all future allocation. The then DoT Secretary D.S. Mathur replied to this letter on November 29, 2007 arguing against any such action.

The timing of the letter is particularly significant since it was written after all correspondence between the Prime Minister and Mr. Raja and between the Finance and DoT Secretaries had been exhausted.

Note never revealed

JPC members point out that it is very worrisome that this note has been kept under wraps by everyone concerned, including the CBI, which recently provided a detailed deposition to the same JPC without so much as a whisper about such a document. Such concealment cannot be justified after so many developments have taken place — that it is now nearly four-and-half years after the scam broke out; that FIRs have been registered against several companies and officers of the government, including a former Union Minister; that multiple cases have been filed in a High Court and a PIL in the Supreme Court; that the Supreme Court has issued an order cancelling 122 licences on February 2, 2012; and then came over 100 statements, press releases, TV interviews, depositions in the JPC and even statements in Parliament.

Dr. Singh himself held a full press conference on the 2G scam on February 16, 2011, followed by a statement in Parliament on February 24, 2011. The Prime Minister explained that he did not object to Mr. Raja’s insistence on spectrum allocation at a 2001 price because of the agreement between the Ministries of Finance and Telecom as per the Cabinet decision of 2003, but did not reveal the existence of this critical note from the country’s seniormost bureaucrat.

‘PM failed in his duty’

“This is concrete proof that the PM failed in his duty to raise the entry fee for spectrum by ignoring market conditions as well as a clamour for price revision by several members of Parliament, industrialists, media and top bureaucrats,” Mr. Dasgupta told The Hindu.

According to BJP leader and JPC member Yashwant Sinha, “The fact that the government is using concealment of critical information and misuse of the JPC Chairman’s office to scuttle the 2G probe is a very serious matter.”

Senior BJP leader Arun Jaitley told The Hindu: “The PMO must respond to charges of deliberate concealment of critical evidence since concealment is construed to be a part of criminal intent.”

Chacko defends PM

However, JPC Chairman and Congress MP P.C. Chacko, rather than briefing the media on the JPC proceedings, mounted a detailed defence of the Prime Minister. “The Cabinet Secretary had reported at that point of time — when various aspects were being considered by the PMO, DoT and the Finance Ministry — that if 2001 prices are revised then what will be the implications … It wasn’t the PM’s responsibility to revise the entry fee or spectrum price … He has to refer it to concerned Minister. [The] Telecom Minister has to go through the TRAI recommendation which had clearly said that prices needn’t be revised,” he told a TV channel.

All six BJP members of the JPC and Mr. Dasgupta have already walked out of the JPC to protest Mr. Chacko’s attempts to sabotage any meaningful investigation by steadfastly refusing to entertain demands to call Finance Minister P. Chidambaram and Dr. Singh as witnesses. Mr. Chacko’s attempt to now publicly protect the Prime Minister is bound to deepen this divide, which is expected to reflect in Parliament next month.

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I believe the Prime Minister has every right to decide which advice he wants to go by.

He has a politically empowered Ministry making a policy decision to increase competition by keeping the entry barrier low for new entrants and, thereby, reduce the cost of ownership of a mobile telephone for the lowest income group.

He has a bureaucrat telling him that auctioning will generate more immediate cash for the government.

Should he ignore the political advice or the bureaucratic advice? I do not see any problem in PM seeing the wisdom of one over the other and making a decision on leaving it to the Ministry or overruling the Ministry. That should be the essence of parliamentary democracy.

The public can always decide that they would have been better off with high telephone bills and more money in the hands of the government. If so, they can vote out the party in power at the next election.

Please stop this unnecessary breast beating over a democratic way of running the government.

from:  Cato R Natarajan
Posted on: Oct 20, 2012 at 10:42 IST

Both the Prime Minister and the then Finance Minister seem to be responsible along with
A.Raja, the the then Telecom Minister, in the matter of allotment of 2G spectrum at a throw-
away price since all the three ignored the then Cabinet Secretary's objection to this. One
should thank the Hindu and Shalini Singh for bringing out this information



from:  K.Vijayakumar
Posted on: Oct 20, 2012 at 03:15 IST

Kudos to Shalini Singh, yet again. It is well worth remembering how
JPC has come to be set up ... so much opposition outcry there was
through weeks and months and Parliament itself was out of business for
a whole session. Remember too how a cornered government offered to
answer all queries to allay widespread apprehensions post-CNG that it
had allowed huge loss to the exchequer. PM himself was ready to depose
before Parliamentary panel to reassure the nation. And yet now ...the
ruling party is trying all it can to stonewall PM and Finance
Minister. Such moves are self defeating ...as if something is fishy
after all!

from:  Dharmarajan
Posted on: Oct 19, 2012 at 21:06 IST

Revelations and exposes come thick and fast tainting the totally tarnished UPA govt. Media
goes to town and the common man looks on helplessly as his wealth is looted by these
shameless politicians . All this while our 'honest' Prime Minister stands by in mute
acquiescence . SITs , JPCs , commissions and what have you are instituted freely . Packed
with cronies of the accused how can the truth be uncovered by these bodies ?

from:  Ravi Reddy
Posted on: Oct 19, 2012 at 18:58 IST

Sir, It is rather another disclosure about 2 G
spectrum scam from former cabinet secretary is one more addition to
the skeleton that came out at regular intervals.SIT investigating the
scam has not yet reached any conclusion. On the
eve of his superannuation, our honourable chief justice has given an
opinion about the sanctity of applying "auction" as a method to sell
2 G spectrum. He opined that this auction need not apply in all cases
and but should avoid arbitrariness in alienating the scarce resources
and should fall within the ambit of article 14. UPA ministers are
happy that they did not strictly apply the auction principle and are
not wrong.This has encouraged to appoint the convicted and jailed
minister and M P as members of the parliamentary

from:  E.Sivasankaran
Posted on: Oct 19, 2012 at 14:28 IST

Disclosure of important facts by Mr. Chandrashekhar shows that the evidences which are available to probe the scam are tip of the iceberg and a lot of evidences and facts are still not put in front of investigating agencies, role of which are also suspicious.

from:  Abhishek Singh
Posted on: Oct 19, 2012 at 13:57 IST

The fish rots from the top.

from:  M. Singh
Posted on: Oct 19, 2012 at 13:49 IST

A.Raja was just a door.Why shouldn't Manmohan singh Step down Rs. 1,651 crore of curse on people of india isn't big enough

from:  manu
Posted on: Oct 19, 2012 at 12:27 IST

The Prime Minister proves himself to be a puppet again. Congress is
ruining the Nation in all possible ways.I don't think the scam reduced
the call rates ,because many of the allotted licenses were sold or the
companies were bought by other majors at a very higher amount.

from:  nandu
Posted on: Oct 19, 2012 at 12:26 IST

We do not understand why Mr.Chacko is trying to protect prime minister.
Our cabinet under PM have proved they do not care about the worries f common man, they care about the support of its allies.
TheHindu Ref:
A. Raja, Kanimozhi and Suresh Kalmadi have been made members of the Parliamentary Standing Committees on Energy, Home Affairs and External Affairs respectively.

from:  srinivas
Posted on: Oct 19, 2012 at 12:26 IST

Demand from some members of JPC to call MR. Manmohan Singh for cross examination is legitimate. At least now, will Our PM appear in front of JPC? Getting back the scam money to the country is most important and judiciary has to focus on this. Punishing the corrupt people involved is next most important.The danger is,AAM ADMI(Common People)Slowly loosing the confidence in our democratic system. If this continues, we may become a "Banana Republic".

from:  C S Sundaresha
Posted on: Oct 19, 2012 at 12:14 IST

the allocation of 2g spectrum at 2001 prices has made government loose
crores of rupees which could be used for infrastructure and other
programmes, which would benefit people more with more development and
more job.

from:  keerthi
Posted on: Oct 19, 2012 at 12:11 IST

Do we have to still beleive that PM Manmohan singh is honest? Can he be a custodian of common Indian citizen?

from:  M.Gnanasekar
Posted on: Oct 19, 2012 at 11:58 IST

also why this note didn't surface in PAC investigation is too a mystery
as that of cong.govt's real PM.

from:  ramachandrasekaran
Posted on: Oct 19, 2012 at 11:58 IST

What can be more appaling than this revelation about the former cabiner secretary.s note on the underpricing of 2G spectrum.But for the persistent questioning by Gurudas Dasguptha even the existence of such a note would continue to have been in the dark.IfThe Former Cabinet secretary's devotion to duty had informed the PM on the underprising of the 2G,why was not such a devotion to duty found wanting in the PM?There appears to be a deep routed conspiracy to deliberately suppress this fact even all along.Govtt had chosen to deny any wrong doing.In the USA Nixon was shown the door for denial of the complicity in watergate scandal.Regardless of the positions held,similarly the door should be opened to exit all those involved.Bureaucracy has shown greater sense of responsibility than the politicians as both the cabinet secretary in his note to PM ad subbarao as secretary to FM had forewarned on the deal

from:  v n ramachandran
Posted on: Oct 19, 2012 at 11:39 IST

As noted by Mr. Ram in his comments, we cannot expect a n unbiased
outcome from the present JPC. On the lines of EC the JPC should be
headed by a three member panel, consisting of the present incumbent ,
Mr. Yeshwant Sinha of the BJP and Mr. Gurudas Dasgupta of the CPI as
they are well equipped in the matter and represent the present group
of parliamentarians. This re-composition will ensure that the
proceedings are conducted in a fair and unbiased manner that meets the
ends of justice.Like a judicial bench, the majority verdict over
dissenting ones if any, should be binding. If needed, a special
session of parliament may be convened to get its nod to implement this
change forthwith and to speed up the completion of the JPC
proceedings.

from:  Shekar
Posted on: Oct 19, 2012 at 11:28 IST

We do not understand why people
still call Manmohan as so-called 'Honest' man.

from:  Magoma
Posted on: Oct 19, 2012 at 11:18 IST

This country is being looted at larger sacle as compared to pre-independence era. All the fruits of growing economy are shifing in tax-free heavens due to such large scale corruption in India. God save my country!!!

from:  Rajendra
Posted on: Oct 19, 2012 at 11:01 IST

Once again the bureaucrats - the so-called Babus - have shown themselves in good light unlike the politicians, including the Prime Minister, who do not want to come out into the open.

from:  Gaurav Karunakar
Posted on: Oct 19, 2012 at 10:23 IST

How come a JPC have a member of the party ,which has ministers accused
of a scam ,be the deciding authority? In such a case,can a bias be
avoided? It is only appropriate that the terms of who heads a JPC be
tweaked,with powers to impeach members who are suspected of being
biased,by the rest of the members of JPC.It is more appropriate that the
JPC ,contradicting its meaning ,can also involve members from the
judiciary,say a retd supreme court judge as a head ,to render impartial
study into the referred cases.

from:  Ram
Posted on: Oct 19, 2012 at 10:17 IST

Man Mohan Singh has failed the Indian state repeatedly and must resign forthwith.

from:  Ram Krishnaswamy
Posted on: Oct 19, 2012 at 09:59 IST

On Irrigation scam in Andhra Pradesh, the PM says money does not grow on trees. On 2G scam, the PM said that there is no loss. The head of the most corrupt Indian government ever now says mindless negativity on corruption will damage India's image.

from:  Shyam
Posted on: Oct 19, 2012 at 09:29 IST

1." More importantly, it was not written suo motu, but submitted in
response to a specific enquiry made by the Prime Minister regarding
the financial implications of the allocation of scarce 2G spectrum at
the 2001 price".
2."Dr. Singh’s silence on the matter is particularly inexplicable
considering that Mr. Chandrashekhar’s note was consistent with his own
letter of November 2, 2007 to ex-Telecom Minister A. Raja, seeking
either auctions — where legally possible — or an increase in the entry
fee. Mr. Raja had replied to Dr. Singh’s letter on the same day,
refusing to either auction the spectrum or enhance the entry fee".
3."The Prime Minister explained that he did not object to Mr. Raja’s
insistence on spectrum allocation at a 2001 price because of the
agreement between the Ministries of Finance and Telecom as per the
Cabinet decision of 2003, but did not reveal the existence of this
critical note from the country’s senior most bureaucrat".

Congress is 'THE' party with a difference!

from:  Shekar
Posted on: Oct 19, 2012 at 09:16 IST

This is usual functioning of UPA administration and its normal use of CBI to conceal all the critical documents. Hindu is the only media exposing this concealment and other media are busy covering petty information...

from:  VIJAY
Posted on: Oct 19, 2012 at 09:09 IST

Good work, JPC. CBI has something to explain too.

from:  Reader
Posted on: Oct 19, 2012 at 08:40 IST

How would have the advice affected the price to the common man? Would
the user have had to pay a higher price had the advice been taken by
the PM ? The government at that point of time was interested in making
sure that the user price is kept low. All this pricing business wont
take us far.Did Raja make money by preponing the date of allotment and
if so how much? That is important and not how much the government did
not make on keeping the price low.

from:  P.Tauro
Posted on: Oct 19, 2012 at 08:00 IST

The fee of 36000 crore rupees per allocation would have been passed on to the customer.
While the urban middle class may have coughed it out, it would have left the rural poor out of
the communication revolution. Cell phone revolution is the only example where the private
industry has really worked for the rural poor, invaluable, the biggest cultural and socio-
economic change we have witnessed since independence. Helps people connect to
markets, access information, stay in touch. Doling away the spectrum at nominal fee was
the right thing to do.

from:  Anand
Posted on: Oct 19, 2012 at 07:23 IST

What these revelations mean in sum and substance is that the PM failed to demonstrate clear leadership in difficult situations. While the compulsion of coalition politics is cited as a defence, the fact remains that the PM himself is a choice of circumstances and not a leader in his own right.

What else can one say?

from:  varadarajan raman
Posted on: Oct 19, 2012 at 07:20 IST

Congress Party- What a shameless party. People of India should see to it that the name and the party are erased out of the country in the next general election. Every member of the party, from Top to Bottom, is absolutely without any patriotic feeling.

from:  Shyam.
Posted on: Oct 19, 2012 at 07:13 IST

This is a sad news. The damning indictment of the PM's act of omissions have now been fully exposed. But, as usual, the PM will not utter a single word on the issue.

from:  Pramod Patil
Posted on: Oct 19, 2012 at 06:46 IST

So,after coalgate,the PM is now a target in the 2G scam too.Sinning by
inaction and silence is equally culpable and more so, if you happen to
the PM,where the buck stops.Of course, under the Congress the Buck is
really elsewhere

from:  Srinivasan Pattoo
Posted on: Oct 19, 2012 at 06:25 IST

Now we are going to see a spate of such 'revelations' from ex bureaucrats and small time politicians. This will get some quick mileage in the media but overall not help with the resolution of the issues at stake viz corruption at all levels of government in India.

from:  Manoj
Posted on: Oct 19, 2012 at 06:13 IST

They shouldn't stop at walking out of the JPC. All parties in opposition
should block all Parliamentary business till PC Chacko apologizes for
acting as Manhmohan Singh's bodyguard rather than the chairman of a
parliamentary committee and the PM and the FM are summoned before the
JPC to answer questions as to what was their part in the loot of lakhs
of crores of the nation's money.
Pressure should be directly on Chacko. Either he relents or Parliament
is blocked, period.

from:  Aritra Gupta
Posted on: Oct 19, 2012 at 05:48 IST

Hope the CMI investigations are driven to their logical conclusion. If nothing, the GoI should cancel the license and re-auction the spectrum with proper pricing strategy.

from:  Yuvi
Posted on: Oct 19, 2012 at 05:34 IST

My feeling that there were bigger political fish than A. Raja involved in the 2G Scam appears to be coming true.

from:  krishna
Posted on: Oct 19, 2012 at 04:22 IST

Comprehensive analysis and comments without mincing words...Qualities apparent in investigative reports by this writer,from time to time..Respects to the writer and to The Hindu that espouses just causes...Permit me to add a quote adduced to Albert Einstein:
The world is a dangerous place to live; not because of the people who are evil, but because of the people who don't do anything about it.
Albert Einstein
Writers like this bring hope in a dangerous world!

from:  chellappa hvv
Posted on: Oct 19, 2012 at 04:21 IST

The country has lost billions of rupees due to the 2G scam. 'Autopsying' could lead to some people who were responsible for the scam but never help in recovering the lost money. The country and the government should start to think on recovering the lost amount.

from:  Srivenkat
Posted on: Oct 19, 2012 at 03:23 IST

Such concealment of important note only further raises question about
how Dr. Singh and his party are hoodwinking the country. Truth must come
in the end.

from:  Ankit
Posted on: Oct 19, 2012 at 02:57 IST

This comment may not be published. However, I think there is foul play from the both parties involved- one involved in corruption and one who propagates the news of corruption. The speed of publishing many corruption scandal baffles me as much as the corruption scandals themselves. The credibility of both parties are now in doubt. Even Financial Times is now reporting the Wallmart investment problem in India. it seems fishy and worth investigating.

from:  ketan
Posted on: Oct 19, 2012 at 02:54 IST

Revelations made by former cabinet secretary give us the answer to the question why our Prime Minister is so eager to amend RTI Act. He don't like people people knowing his faults. He just performed a mute spectator's role in all the scams rather put any effort to curb them. Now his credentials to continue in the PM's chair is come under a question mark. If he feels a little blemish, he should admit the whole story to the nation just like US prsident Bill Clinton did.

from:  Rajesh P R
Posted on: Oct 19, 2012 at 02:51 IST

This scandal is a disgrace to our democracy. As if the scandal was not
enough, now it turns out the Prime Minister was either incapable or
incompetent to fix the situation even when he had the chance to do so.
It makes you wonder, why was Dr. Singh so helpless that he couldn't
even question the DoT or Mr. Raja's intents. Dr. Singh with his
background in economics should have been the first person to sniff this
rotten deal and done what is in the country's best interest. To make
even worse, now we find out he colluded to hide the fact that he was
aware of this scandal from the point of its inception. If this happened
in any other country, Dr. Singh would have been impeached by now.

from:  Patel
Posted on: Oct 19, 2012 at 02:07 IST

Former cabinet secretary's shocking revelations once again proved that the No.1 accused in 2G Spectrum scam should be our Honourable Prime Minister who knowingly allowed the scam to happen and concealed so much relevant informations about the scam.

from:  Rajesh P R
Posted on: Oct 19, 2012 at 02:00 IST

sometimes it makes me feel, what is the point of investigating ? what is
the use of JPC when we all know nothing will come out of it. Even if
people like Mr. Chandrashekhar step forward. The culprits will not be
punished. I think what media is doing is not enough, the politicians
need to be stopped, this is our only country.

from:  Vignesh
Posted on: Oct 19, 2012 at 01:38 IST

Dreadful, to say the least. JPC itself was constitutionally an awkward creation.
The roof is falling.

from:  Soundararajan Srinivasa
Posted on: Oct 19, 2012 at 01:24 IST

Why these meetings are closed door meetings.. all this corruption money
is stolen from tax payers and they should be allowed to hear everything
that is discussed there.. This is just cheating people twice.. We do not
need briefings we want complete telecast of the proceedings.

from:  Amol
Posted on: Oct 19, 2012 at 00:28 IST

Usually, in that kind and that level of a scam case, in the Western, PM doesn't take responsibility but the convicted must take responsibility since the consideration must be readily transfered from the scam artist to the original owner spontaneously, like fluid. The concept may be leniant for Indian patriots, though, in result, the event of revealation will work to bring healthy civil resornance, in some sense, to the cast-self. I hope like that in this period of time.

from:  Choi Heungsun
Posted on: Oct 18, 2012 at 23:46 IST
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