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Updated: June 2, 2010 02:11 IST

Recover lost revenue from 2G spectrum allocation: CPI(M)

Special Correspondent
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CPI (M) parliamentary party leader Sitaram Yechury
The Hindu CPI (M) parliamentary party leader Sitaram Yechury

Estimating a whopping Rs.1,90,000 crore revenue loss to the exchequer in the allocation of 2G spectrum, the Communist Party of India (Marxist) on Tuesday said the Centre should take steps to recover it, drop Telecom Minister A. Raja and suspend officials against whom the prima facie case exists.

Stating that the recent 3G auction has established the market prices of spectrum, CPI (M) Parliamentary Party leader Sitaram Yechury said the figure was calculated on three counts: the Rs.1,24,000 crore loss due to 122 licences of new entrants in 2008; Rs.36,000 crore loss due to cross-over licences permitted to CDMA operators (Dual Technology Licence); and Rs. 30,000 crore loss due to excess spectrum occupied by GSM operators beyond the 6.2 MHz.

‘Take action'

“The Prime Minister has said in Parliament that India can ill afford crony capitalism. We are now seeing a clear case of certain companies being earmarked and siphoning off money elsewhere. If the Prime Minister is sincere, he should take action,” Mr. Yechury told journalists here, while releasing a copy of the letter he wrote to Prime Minister Manmohan Singh on Monday.

While welcoming TRAI's (Telecom Regulatory Authority of India) opinion that GSM operators, who hold spectrum in excess of the original spectrum bundled with the licence, should be made to pay market-based prices retrospectively, as benchmarked by the 3G auction prices, Mr. Yechury said the same principle should be extended for new entrants as well as CDMA operators for the cross-over licence.

‘Weak argument'

He said the argument given by Mr. Raja — that 2G licence/spectrum was given cheap (Rs.1,650 crore for an all-India licence covering 22 circles) in order to keep prices for the consumer low — did not hold water since the Ministry illegally modified the merger and acquisitions guidelines and rollout obligations allowing for the sale of equity.

“This means that though the national exchequer did not receive the market price of 2G spectrum, the companies benefiting from the Minister's largesse conducted a sale of spectrum at the current market price, converting what should have been an open, transparent public auction. This explains why Swan and Unitech were able to get five to six times the value of the spectrum from only a part of their equity sale,” Mr. Yechury's letter said.

He alleged deliberate acts of commission by Mr. Raja, including violation of the TRAI Act, misuse of the 2003 Policy and TRAI recommendations of August 2007, and arbitrary operation of the first-come-first-served policy, which was struck down by a Delhi High Court judgement as “… a change in the rule after the game has begun.”

Asked about the DMK reaction that Mr. Raja was being targeted because he was a Dalit, Mr. Yechury said the charge was not against an individual but against the Telecom Minister.

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