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Updated: September 22, 2011 10:01 IST

Pranab note links Chidambaram to 2G price decision

Legal Correspondent
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Union Home Minister P. Chidambaram.
PTI Union Home Minister P. Chidambaram.

Leaning heavily on a secret note on 2G pricing prepared by the Union Finance Ministry and sent to the PMO with Finance Minister Pranab Mukherjee's approval, Janata Party president Subramanian Swamy on Wednesday urged the Supreme Court to order a CBI probe against Union Home Minister P. Chidambaram for his role in the sale of valuable spectrum at throwaway prices.

The 25 March 2011 document, written by P.G.S Rao, Deputy Director in the Finance Ministry, to Vini Mahajan, Joint Secretary in the PMO, on the allocation and pricing of 2G spectrum, broadly suggests that Mr. Chidambaram, who was Finance Minister at the time the spectrum was sold on a first come, first served basis by the former Telecom Minister, A. Raja, could have insisted that the valuable resource be auctioned. The covering letter to Mr. Rao's note says: “Finance Minister Pranab Mukherjee approved the note after personally inspecting the 11-page document.”

The document referred to a Department of Telecom (DoT) letter, dated November 29, 2007, recommending both the revision of the entry fee fixed in 2003 and the adoption of the auction methodology for determining spectrum usage charges. It said the position paper was prefaced with a note dated January 9, 2008, which inter alia mentioned that a meeting of the full Telecom Commission, scheduled for January 9, 2008, was postponed to January 15, 2008.

It said: “This position paper was used by the then Finance Minister [Mr. Chidambaram] as a basis of his ‘secret note' to the Prime Minister on January 15, 2008, wherein an auction-based mechanism was recommended for future allocation of spectrum [beyond the start-up spectrum] with the spectrum allocations having been made in the past to be treated as a closed chapter.”

The DoT would have been forced to cancel the 2G licences that are now the subject of a criminal investigation had Mr. Chidambaram, as Finance Minister, stuck to his original demand for auctioning the initial ‘start-up spectrum' of 4.4 MHz each allotted to the 2008 licensees.

The document said that the Ministry “implicitly agreed to the imposition of the same entry fee as that prevailing in 2001 for licences allotted up to December 31, 2008.” This despite a November 22, 2007 note by the then Finance Secretary and present RBI Governor, D. Subbarao, that the 2001 mobile licence entry fee of Rs.1,650 crore was applied and not the market price at that time.

The note explained how there was a “consensus” between Mr. Raja, who is now at the centre of the CBI's investigations into the 2G scam, and Mr. Chidambaram not to charge more for spectrum up to 4.4 MHz.

The note to the PMO said the DEA was legally within its rights to revise the spectrum pricing, even though the Letters of Intent were already granted and though there was anticipation of litigation from companies which were already allocated 2G spectrum licences.

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How is it that Mr.Chidambaram is immune to investigation by CBI while Raja is not when these two were the ministers (Finance and Telecom) empowered by the Union Cabinet in 2003 to jointly take a decision on the allocation of 2G spectrum? Doesn't this prove the allegation by the Civil Society activists that CBI is not an impartial investigating agency and it is prone to manipulation by the government? Not only that the CBI didn't interrogate Mr.Chidambaram, but also it told the Supreme Court that Mr.Chidambaram had no role in the 2G scam.

from:  K.Vijayakumar
Posted on: Sep 23, 2011 at 18:24 IST

I have read the memorandum sent by the then Finance Minister P. Chidambaram to the Prime Minister. It is a confidential memo written very cautiously on a major shift of policy. The government under Vajpayee were initiators of some very new policies amidst a shift to market economics and they continued to weather the problem from tight scrutiny of regulated economics of nearly 40 years. PC nor anyone in his position could not have visualized or forecasted the rise of the telecoms industry to this value and the coming of mobile phone operators with Dayanithi Maran bringing down the price of billing to make everyone talk. Of course everyone would like to be a mobile phone operator: how does the government allocate the parcels? Would not auctioning the parcels become a serious ursurpation of ethics and justice? I do not believe so. There is ambiguity of policy yes, however an issue of ambivalence cannot be included. The memo should not cast doubt of ethics on PC alone albeit the cabinet.

from:  Richard Kamalanathan
Posted on: Sep 22, 2011 at 17:45 IST

Obviously, looks like the UPA ministers thought the people are idiots and deny the country the lakhs of crores of rupees,which could have got additionally for the spectrum. Our most financially educated PM needs a special mention for this master role in this cover up. The rewards for this cover up for Chidambaram should be too tempting to ignore. But for Subramaniam Swamy and CAG audit, wonder this scam would ever have come out of the carpet.

from:  Prasad
Posted on: Sep 22, 2011 at 08:51 IST

The events only prove the common apprehension among the citizens that Raja alone is not to be blamed and is culpable. Whatever the reason, the entire cabinet is responsible for this. The moral responsibility is on the PM for this sorry state of affairs.

from:  G.Naryanaswamy
Posted on: Sep 22, 2011 at 08:10 IST

After watching the Indian politics from close quarters, one gets convinced that our millionaire political representatives do not deserve to be 'paid' salaries and TA for their voluntary 'services'.

from:  Vyas K Susarla
Posted on: Sep 22, 2011 at 07:57 IST

They were all in this great looting.Mr.Swamy is correct in bringing this to the notice of the public.Mr.P.Chidambaram will escape with the help of Mr.Sibal who is now enjoying the fruits of being the Telecom Minister.Day by day we are seeing how all these Ministers were corrupt and hence the names of those having foreign accounts are not being revealed. The jan Lokpal Bill will not see the light of day and unless there is a big revolution which will lead to the running away of this government from Delhi.

from:  S N Iyer
Posted on: Sep 22, 2011 at 07:57 IST

It is only the fools & the naive who will believe that only RAJA & few Officials are involved in the 2G Scam. > The total loss to the EXCHEQUER is 1,76,000 Crores. Assuming a kickback of 50%, the deal would have fetched 85000 Crores. To believe that ONLY RAJA & a few officials shared this 85000 Crores is height of stupidity. CBI is not acting fair in this matter. It makes us wonder whether CBI is an INVESTIGATIVE AGENCY or a COVER UP AGENCY. It is because of Subramanya swami, that the investigation & revelations have reached at least this stage. It is quite obvious that a BIG COVERUP DRAMA has been let loose. [1] PM defending Raja in the initial stage. [2]Kapil Sibbal claiming there was no LOSS at all in the 2G [3] TRAI saying there was no loss at all. [4]Congress vehemently opposing setting up a JPC Probe. I believe ANNA should sit on another fast now.

from:  Satya
Posted on: Sep 22, 2011 at 07:55 IST

your article,Pranab note links to Chidambaram for 2G price decision was a good to read.Raja is one actor in this Big Scandal Movie,other actors and the master mind Director will follow shortly.This scam made a record in the Indian Politics History.Because of this scam,Corruption inflation , and Black money,the Commonman is Struggling.UPA has lost the reputation,and the Commonman has already Eradicated Congress name from his mind.

from:  K.Ragavan
Posted on: Sep 22, 2011 at 07:21 IST

It is regrettable that Ministers do not have to courage to stand by their actions once taken,when it later transpires that that action was not right.Why do they have to find lame excuses to defend their indefensible deeds?Decency and moral values dictate that they should put in their papers.That would have been the most graceful thing on their part.But then our ministers who change political parties like they change clothes cannot be expected to know about such niceties.

from:  Raj Kumar
Posted on: Sep 22, 2011 at 07:11 IST

National Tel Policy 1999 drastically reduced the high entry fee and opted for revenue sharing, instead. It assured equal opportunity and a level playing field to all operators with a view to make telephone available to all on demand at affordable prices. It was in deference to this policy that TRAI, on every occasion, advised against auctioning 2G and M/s Shourie, Maran and Raja stuck to 2001 prices. Before Raja, there were 5 to 8 operators in each circle who paid 2001 prices. So how can a level playing field ensured to the new entrants by auctioning 2G at 10 times the price, as suggested by the CAG? Due to volume growth, govt collected Rs 90000 cr in the last 9 years as license fees/spectrum charges. Service tax of a like amt extra. When the issue of new licenses was at the advice of TRAI how can anyone ignore its well reasoned advice on price? The tariff came down from Rs 14 per min in 1998 to 30 paise ;the subscriber base increased from one million to 850 m!

from:  C S JACOB
Posted on: Sep 22, 2011 at 07:05 IST

Sir,enough of this investigation by this Swamy. It is always easy to be wise after the event! No body can visualise that loss would be this much at that point of time. Only in 2009-10, it became clear when the Minister in charge,Raja and the Rajya Sabha MP, started with the distribution of 122 licencses, the case became criminal due to bad friendship and collusion and the CBI has done a good job of it.

from:  C G Venkatesan.
Posted on: Sep 22, 2011 at 06:50 IST

Mr Chidambaram is now nailed for his role in the 2G scam for all his Professorial gestures and talk.But what about Dr Singh for all his fabled efficiency as an economist and honesty? Thank you Dr Swamy for your right efforts.Will Dr Amartya Sen now ask for your removal from Harvard as he recently did?

from:  Rabi Mishra
Posted on: Sep 22, 2011 at 05:36 IST

..An ordinary official will be suspended when an enquiry stats against him in any office. But I wonder how this Great PC is allowed to continue even when a senior ,sober and balanced Prnabji reveals something PC..

from:  Prof.R.Kriahnamurthy
Posted on: Sep 22, 2011 at 05:23 IST
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