Prime Minister Manmohan Singh on Wednesday said that the former Telecom Minister, A. Raja, never discussed the controversial ‘first come, first served' (FCFS) policy while giving away telecom licences in 2008.
“How the FCFS policy was implemented, this was never discussed with me nor was it brought to the Cabinet. This was exclusively the Telecom Minister's decision,” Dr. Singh said.
However, he clarified that since the Ministries of Finance and Telecom had agreed to continue with the existing policy of allocating 2G spectrum, “I did not feel that I was in a position to insist that the auction must be insisted.”
On his letter to Mr. Raja in 2007 asking him to look into the possibility of having an auction of spectrum “from a legal and technical angle,” Dr. Singh said that his former Cabinet colleague told him that he had been “absolutely transparent” in his dealings and assured him (Dr. Singh) that he had “done nothing and will do nothing which will not be consistent with the promise that I am making.”
The Prime Minister pointed out that Mr. Raja had said that auction was something that had not been suggested by the Telecom Regulatory Authority of India (TRAI) and the Telecom Commission.
“He [Mr. Raja] also said that if we had the auction, it would not give a level playing-field for the new-comers because the existing players have got the spectrum free of charge up to a certain mega hertz,” Dr. Singh recalled.
“And therefore he said that TRAI's advice, the Telecom Commission's advice, and his [Mr. Raja's] own view was that the auctions are not the right way forward as far as 2G spectrum is concerned, and he also mentioned in a subsequent letter that he is agreeable to auction 3G spectrum,” Dr. Singh pointed out.
He also questioned the basis for calculating the loss from grant of licences in 2008 as the policy then was against the auction of spectrum.
Linking the issue of revenue loss from 2G spectrum with various subsidies that the government provided to the poor, Dr. Singh said: “There are various estimates, but you have to assess what the right magnitude is after asking yourself what was the right price…the then existing policy of the government was that auctions should not take place. And if auctions are not taking place, then what is the basis for you to calculate a loss? I am not in a position to say that there is a foolproof method in which one can determine the extent of the loss.”
Asked why he retained Mr. Raja as Telecom Minister in the UPA-II government, the Prime Minister said that the DMK had suggested Mr. Raja and Dayanidhi Maran for the Union Cabinet.
“At that moment, there was no reason to feel that anything wrong had been done,” Dr. Singh said.