A simmering political cauldron, stoked by the recent decisions of the Finance Ministry to hike fuel prices and FDI limits in retail, is likely to now boil over, with RBI Governor D. Subbarao admitting to the Joint Parliamentary Committee (JPC) investigating the 2G scam that he could have performed better in his role as Finance Secretary.

Dr. Subbarao’s confession was in response to repeated questioning by Communist Party of India leader and JPC member Gurudas Dasgupta as to whether he could have performed his duty better as Finance Secretary and the custodian of the Finance Ministry, which is mandated to protect exchequer revenue.

Asked by Mr. Dasgupta to quantify the revenue loss on account of bypassing auctions for 2G spectrum in 2008, considering the variance between the CAG’s Rs.1.76 lakh crore and the CBI’s Rs.30,000-crore loss estimates, Dr. Subbarao said, “If it was left to me, I would have tried to rediscover the market price of 2007.”

This statement is effectively corroborated by an Approach Paper sent by DoT Secretary Siddharth Behura one month after the scam on February 8, 2008, suggesting that Dr. Subbarao had insisted even subsequent to the award of Letters of Intent that spectrum can be auctioned. However, later contradicting himself, Dr. Subbarao went on to tell JPC members that he did not believe any loss had occurred from the 2G spectrum sale of 2008.

When quizzed about the exchange of letters between Prime Minister Manmohan Singh and then Telecom Minister A. Raja, he said the Finance Ministry was not aware of those. He further placed on record that one very important file was not marked to him.

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