A. Raja, Minister for Communications and Information Technology, speaks out
In the eye of the storm again, Union Communications and Information Technology Minister A. Raja asserts in an interview to The Hindu that he has not deviated from any laid-down policy in the allotment of 2G spectrum. “I have explained this so many times. Now, again the same questions reappear,” he tells R.K. Radhakrishnan in New Delhi.
The alleged leaks from the report of the Comptroller and Auditor-General (CAG) say that you caused a loss of Rs. 1.77 lakh crore through your policies of allotment of spectrum, the introduction of new players, and changes made in some licence conditions. Can you explain?
The issues that have been raised can be broadly divided into two categories. First, the alleged substantial loss to the exchequer and secondly, procedural lapses.
The National Telecom Policy, 1999, which was approved by the Union Cabinet and ratified by Parliament, has authorised migration from the Auction Route (NTP 94) to the Revenue Sharing Route (NTP 99). The leaked CAG report says that we should have adopted the Auction Route and taken an arithmetical voyage on the 3G boat. So, the yardstick on which the presumptive loss is arrived at itself is not correct.
What we have here is a difference of opinion between one constitutional functionary, the CAG, and other constitutional functionaries, the Union Cabinet and Parliament. The CAG appears to disagree with the Cabinet, Parliament and the Telecom Regulatory Authority of India (TRAI), a statutory body, as well as the Planning Commission. In my opinion, these institutional aberrations must be resolved either by the judiciary or by the parliamentary mechanism.
What about the loss of Rs. 1.77 lakh crore that the Opposition says was caused because of the policy?
As I have explained to The Hindu in earlier interviews, the basic question is why 2G spectrum was not auctioned. It simply cannot be auctioned because the National Telecom Policy 1999, a document approved by the Union Cabinet and ratified by Parliament, says so. The Tenth Five Year Plan and the Eleventh Five Year Plan, and the recommendations of TRAI, are also in line with NTP 99. If you need any amendments to NTP 99, this has to be done only by Parliament.
The present policy of grant of new Unified Access Service Licences and 2G spectrum is a consistent and transparent policy of the government since November 2003. There is no deviation in the policy approved by the Cabinet on October 31, 2003. Established policies regarding issue of licence, allocation of spectrum and charges thereon have been followed since November 2003 by successive governments till date.
The government's broad policy of taxes and regulation for the telecom sector has been and has remained a promotional one where revenue considerations play a secondary role. These policies were not changed because they led to an unprecedented growth of the sector, a huge jump in tele-density. In the rural areas it has jumped to 28.46 per cent as on September 2010 while total tele-density (aggregate of rural and urban) is 60.99 per cent. The total number of telephones now is 723 million, as against the Eleventh Plan target of 600 million.
Also, the annual licence fee and the spectrum charges are the largest non-tax revenue [components] of the government. Till March 2010, the government has collected about Rs. 77,938 crore under the revenue-sharing regime.
On the allotment of spectrum beyond 6.2 MHz, the presumed loss to the exchequer on this ground is Rs. 36,729 crore. According to the details with my Ministry, it was on January 31, 2002 that the then Minister, Pramod Mahajan, took the decision to allocate spectrum beyond 6.2 MHz up to 10 MHz subject to availability, on [the basis of] additional revenue-sharing of 1 per cent of AGR (without upfront charges for additional spectrum beyond contractual rights) and on the request of the telecom service provider reaching the prescribed subscriber base.
The next Minister, Arun Shourie, allotted 21 MHz over 6.2, and Dayanidhi Maran [allotted] 38.8. I allotted 12.6 MHz. When I allotted, I also placed the rider that charges will be levied as determined by the government for spectrum beyond 6.2 MHz as it was beyond the contractual amount.
This does not mean that I accuse or shift the responsibility to my predecessors. The entire process ever since 1999 is a matter of legacy.
The presumptive loss has no logical base, nor is it [the result of a] plausible arithmetical exercise. Loss cannot be arrived at on the basis of assumptions because there is no avenue for ifs and buts in policy and procedure.
The Opposition is stalling Parliament because if it participates in a debate, it will be exposed.
But the charge is that you caused huge losses to the exchequer…
I have firm reasons to believe that these charges are being levelled because I broke the cartel in the telecom sector. When the same policy was implemented within the cartel right from 1999 till a few days prior to my assumption of charge, no Minister was criticised. See the CAG report for 1998-99: it severely criticised the government policy of migration of existing licensees from fixed fee to revenue-sharing route. There were several harsh observations. But for reasons best known to the CAG, it has been a silent spectator from 2000 and it never questioned the Ministry in its subsequent reports.
I will explain why the loss is notional, using the example of government subsidies on account of fertilizers, petrol and rice distributed under the public distribution system (PDS). If you consider the market rate of these commodities and say that the loss to the exchequer because these were sold at a throwaway price was so many thousand crores, can we accept that?
There's a policy based on sound reasoning and there is a statutory body that decides on dynamic issues from time to time. Hence, by virtue of the NTP mandate, only the revenue sharing route is available to us.
Why did you ignore the advice of the Law Ministry and the Finance Ministry on the spectrum issue? There is also the charge that you ignored the Prime Minister's advice.
The Law Ministry's advice was not suo motu. A reference was made by our Ministry to the Law Ministry on the specific and limited issue of how to deal with the huge number of applications when the availability of spectrum is very limited. In the note itself, we had also suggested a few methodologies. The Law Ministry, instead of giving an opinion on this, suggested that it should be referred to the Group of Ministers. The advice is neither related to spectrum pricing nor quantum of revenue-sharing. This has been clarified to the Prime Minister as the Department wanted to go along with the existing policy of first-come, first-served, subject to the availability of spectrum.
The Finance Secretary wrote a letter to the Telecom Secretary that the entry fee that was fixed in 2001 needs to be changed. Of course, the fixing of the entry fee is well within the domain of TRAI. When TRAI gave a very firm and categorical recommendation in 2007 that the entry fee need not be changed, and since the same was already approved by the Telecom Commission in which a representative of the Finance Ministry is also a member, the Telecom Secretary replied quoting the TRAI recommendation to the Finance Secretary — where the circuit ended.
Similarly, the Prime Minister forwarded some references with respect to spectrum allotment and subscriber criterion. All issues and procedures contemplated were put forth to the Prime Minister, which were duly acknowledged. It is quite normal for Cabinet Ministers to correspond with one another and for Cabinet Ministers to correspond with the Prime Minister. No inference can be drawn that I ignored the advice of the Prime Minister merely based on correspondence between him and me.
Why did you deliberately change the cut-off dates for allocation of licences?
As long as the first-come, first-served policy is adopted a cut-off date is irrelevant, because the person who applied first has to be considered first. Based on tentative availability of spectrum and the applications received up to the issue of the Press Note on September 25, 2007, the first lot of applications received till that date was considered. The question is whether any applicant was bypassed or ignored.
The remaining applications will be processed subject to availability of spectrum. It is a misconception in the minds of some in the media that the remaining applications were rejected.
Why do you think you are being targeted?
I am forced to believe that there is a huge lobby that does not want changes in the telecom sector. There are people, for instance, who are against number portability. There is the cartel that has declared that it will get me. It has power over the media, it has huge resources, huge money. These events are being used by some political parties to defame the DMK. But the fact remains that the people have benefited. That is because of policies laid down and efforts taken by me and the government.
Of 122 licences given, 85 were given to companies that did not fulfil the eligibility conditions. Why?
This is again a pithless observation. The CAG cannot attempt to encroach on the powers beyond Article 149 and decide the issues under Article 32 or 226 which is constitutionally mandated only for the Supreme Court and the High Court respectively. It must be clarified that the ineligibility has been observed in the CAG [report] with respect to the change-of-object clause, net worth and nomenclature of company as it is not found with the Registrar of Companies (RoC) as on the date of the application. We rely on self-certification. Entry in RoC records is only a procedure. The Law Ministry has now opined that the entry of RoC on a later date has no legal injury when the resolution is duly passed to that effect and certified by the Company Secretary.
Will you accept that NTP 99 is a flawed policy?
No, the letter and spirit of the mandate under NTP 99 is happening. Policies should not be changed because of a change in the political entity in government. NTP 99 was devised by the NDA [government]. I don't want to change it merely because it was drawn up by a BJP-led government. I have shared in Parliament itself that the vision of the then government was correct.
What happens consequent to an adverse observation on the part of the CAG? Will you step down?
I respect the CAG, which is one of the institutions for audit under the Constitution. Yet, the CAG report cannot be taken as judicial findings either to convict an individual or draw a conclusion on the policies of the government until the due process is exhausted.
Moreover, the CAG report for the period 1998-99 placed before Parliament in 2000 also had similar observations against the government. Neither the Public Accounts Committee nor Parliament has taken any decision to change the policy. In the absence of any advice/action from the PAC, the CAG did not find any flaws subsequently till 2010. It is for the CAG to explain.
Allegations and counter-allegations are quite common in public life. As Justice V.R. Krishna Iyer said, “The highest is not above the law; the humblest is not beneath the law.” Let the law take its own course. I do not want to go out with stigma.
Keywords: 2G spectrum issue, A. Raja, CAG report, Union Communications and Information Technology Minister
I think it would not be right not to let an accused speak at all. It is not just a question of accusing, prosecuting or penalising the guilty, it is also a question of fair process. A Raja will have to face prosecution and public outrage is he has done such serious wrong. But, are we asking for a media that would not talk to anyone caught in a controversy, scam or any other serious crime? People have the right to tell their stories, their version of what happened. And unless an accused speaks, we cannot catch him in lies, contradictions and evasions. Pat, or glib replies to interviewers are not always accepted without suspicion, without questions. But, it is important that we do not become a people that convicts without a trial. Granted, we have reason not to trust our politicians or the efficiency or speed of our judicial processes, we still cannot say that The Hindu was wrong to talk to A Raja or publish the interview. As the flurry of questions and comments shows, elaborate or detailed answers provided in an interview do not vindicate a person. But, they might give us grounds to think of alternate explanations, versions of what happened. And, is A Raja alone responsible for the entire episode? I think it is a matter of policy and a good newspaper cannot bypass key players in a story based on hype or accusations and an incomplete picture.
I think Mr Raja has some valid points. The number portability is actually a good thing for the consumer, because the telcos usually use this weapon to trap and hold the consumer to ransom. Also one cannot rule out the notorious cartels that have entrenched themselves in the government and its ministries. Breaking the cartels is in itself a good thing. We have to crush these dirty cartels and nexus and vaporize them. The Hindu must be appreciated for giving the reader and Mr Raja a opportunity to show the other side of the coin.
As per his statment, Mr.Raja seems to have merely followed the policies of his predecessors. He doesn't care for the profitablity of the Governement. He does not use his sense of judgement and merely followed the previous policies. Isn't this a thing of shame that a cabinet minister lacks the sense of judgement and incurred such a huge loss to the exchequer?
MR Raja says that from 1999 till now no ministry is critisised. As for as I know Mr Jag Mohan was sacked by Atal Bihari Vajpayee due to telcom loss in which some of the companies didnt give the spectrum license fee in time. Revenue sharing was bought by BJP govt for that. But after 10 years, India has grown by leaps and bounds. In 2008, India is among the largest growing nations in the world. Is it good to sell spectrum as per the policy of 1998(A decade before)?
Hindu ? what a shame ?
CWG,Adarsh and now 2G. Thanks to the Government for dismissing the responsible, but is that a complete solution?Since that their venal actions were proven, severe action should be taken on them which acts as a warning to the politicians or the organizers on the same boat. Government should probe thoroughly into their assets and collect all the misappropriated money like what it did to Ramalinga Raju.
Mr.Raja conveniently suppresses the technological facts.Until 2000, in India, the spectrum was used by GSM operators (Airtel and Birla AT&T) while CDMA was used only for local mobility. With the advent of WLL, CDMA was able to scale up. CDMA Operators BSNL, Tata and Reliance jumped into fray. As users shifted to mobile (due to low cost and convenience over fixed line), the abundant spectrum in 2000 became scarce by 2006. When a resource becomes scarce, auction is the prudent approach. In 2002-03 a level playing field was created for CDMA & GSM operators. The question to Mr.Raja is: 1. As a custodian of national resource why he did not try to maximize the benefit to exchequer. How much of the Rs.77,000 crore came outside the "cartel"? 2. Your predecessors did not shift the timeline arbitrarily and create a melee in DoT to obtain the LoI. While self-certification was OK why there was insistence on cash while obtaining LoI? 3. Without verifying the past credentials of the new operators how can the nations' scarce resource be squandered in the guise of "to break the cartel?" Globally, in PPP where huge investments are required such cartels are bound to happen. The role of the government is to play a balancing act. 4. Whether Mr.Nirpendra Misra and Mr.DS Mathur are lying? Why didn't you counter them or file a defamation case against them? Poor ex-bureaucrats. Not a single media (including DMK's own organ) taint scam on Mr.Arun Shourie. You even being in that Ministry could not unearth any scams. Some can be fooled sometime but all cannot be fooled all time. In your myopic view some irregularities happened knowingly or unknowingly. Exhibit your leadership (something different for Indian politician) by accepting it rather than giving lame duck excuses and move on. Every Indian citizen is aware that as time passes our public will forget and these scams will have their own death. Be smart in future when you smell money under your ministry.
I agree with Seetha. Everybody checks in the current market price before they sell any asset and if the asset in question is going to bring in crores of profit or loss, as head of the Telecom sector he should have analyzed and did some basic math. More importantly why is the evidence of the tape being ignored. Is it not an irrefutable proof that he has a hand in all the underground activity? Even with such kind of evidence why are the Congress and DMK not taking any responsibility? It seems the only thing they are interested in is holding on to their power and position. It is indeed very sad to see Government and the public have become two different entities where the government is not bothered about the general people and the public no longer having any say and being a mute spectator to all the high profile drama.
Being a head of telecom ministry, Mr. Raja should have applied his leadership thinking towards national interest and not merely saying he is adhering to the same old policy. He did not even bothered to listen to his cabinet colleagues on this. Do we have any law to control these type of " anti-national" things? I wonder - if, so these people should be termed as "Desa-Drohi".
There is lot of credence to his explanation when he says a lobby that has been controlling the telecom industry is against him. He has probably brought in new players changing the rules of the game. And the extensive technical verbiage is not helping his cause while establishing him as one that understands his job well. If the confusion created by A.Raja and CAG is not explained in simple terms to the people there is every chance that this controversy might lead to a situation like the selling of mortgage derivates world wide with the layman totally not understanding the details but ending up in a mess and a few raking in billions
Time and again, The Hindu is proving that it is the only impartial daily News paper in the country. The publication of this interview by Mr Raja to Mr R K Radhakrishnan only proves this!
Quote, "I will explain why the loss is notional, using the example of government subsidies on account of fertilizers, petrol and rice distributed under the public distribution system (PDS). If you consider the market rate of these commodities and say that the loss to the exchequer because these were sold at a throwaway price was so many thousand crores, can we accept that?" Endquote
Certainly we cannot. Because in those kind of subsidies, the distribution of wealth was from the haves to the have-nots. But in the case under debate if past policy were to be blindly pursued to make a few handful of companies multi-millionaires at the cost of the inflows to the government exchequer, it is reversing the flow back from the have-nots to the haves.
Quote "We rely on self-certification. Entry in RoC records is only a procedure. The Law Ministry has now opined that the entry of RoC on a later date has no legal injury when the resolution is duly passed to that effect and certified by the Company Secretary" Endquote
Self-certification and no injury indeed! Such naive explanations cannot be termed professional - We cannot have doctors obtaining their license to practice after they have conducted surgery and post-Mortem. Following a precedent to inflict damage to public revenue is no justification to continue inflicting losses especially when others including private companies make huge sums of money anyway as a result of ill conceived and implemented policies - There is no comparison to other kinds of subsidies like fertilizer, electricity and essential commodities.
Auction of spectrum with end-user price control through TRAI and Consumer Groups are the best and optimum alternative to free-market inequalities.
Let this be a trigger for the house to scrutinize amend regulations, rules and statutes that only serve to make a few richer at the cost of the national exchequer. Let the house also enact a law that requires the political party or parties to compensate the exchequer for such losses caused by bulldozing and sweeping policies of a minister. The average citizen will have no objection if such policies can be funded from the coffers of the respective political parties rather through loss of public revenue!
Raja says that everything is done according to law. But Supreme court of India confirmed that the arbitrary advancement of the last date is illegal.
I am sure if the issue is closely scrutinised some areas of conflict of interest will surface (which may be the reason for the actions in the first place) and hopefully the accountability is fixed and guilty punished. only when the guilty are punished, whatever their position is will faith in democracy be restored.
No new information has come out of The Hindu interview. Hindu should publish an investigative report on those IT newcomers who were awarded licences by IT minister.
In spite of the above interview, Mr.Raja has resigned late last evening. It appears that there must be something very derogatory in the CAG report and Mr.Karunanidhi and Mr.Raja had to give up their spirited defence lest it goes against the DMK in the coming assembly elections.
In various interviews to the media, the reasons given for the current policy has been listed as follows
a) When asked about PM having differences with him, he had said (in another interview) that Pranab Mukherjee had agreed to his recommendation. The question is why isn't the media questioning Mr. Pranab Mukherjee on the same ?
b) He says TRAI had agreed for self-certification and also agreed that there is no need to change the license fee. Why doesn't the media question the TRAI officials, on why they agreed to consider ineligible companies and why they felt that entry fee need not be increased considering the increased market size in 2005?
c) If NTP 99, forces revenue sharing, why didn't he go to the parliament and request a change to license fee based scheme, given that telecom subscribers had increased manifold, and the value of any spectrum licenses became much higher during his tenue.
d)How is that 3G licenses were recently given out with just initial license fee, if NTP 99 mandated any license deal ?
e)His point on finance secretary being a member of the telecom commission is very confusing. Who was the finance secretary at that time. How is it, that on the one hand the finance secretary approves TRAI's recommendations by being a member of telecom commission and still writes a letter directly contravening his own approval, asking for an increase in entry fee ? Is he referring to telecom commissions approval in a different period ? This needs to be brought out.
It is clear that an initial decision done to grow the telecom market in 1999, has been mis-used at a later stage to deprive the exchequer of benefits from a larger market at a later stage. Thus, institutional changes and reviews are required when far reaching policy proposals are created. I hope GOI bureaucrats, learn from this incident and drafts far reaching policies with clear fore thought, with enough scope for periodic review.
This investigation should continue through to the end and they should determine which political parties, which political dynasties, and which individuals got paybacks from the hefty profits the companies made by buying spectrum allocation at the cheap rates and then selling them.
I agree with Seetha here in that, as a minister in such a high position, he should have known better (assuming he is not corrupt here). If he cannot take a decision on his own as to which policy would benefit the country, he must go as he has demonstrated that he has no clue about the telecom sector and how it operates. And all this assuming that he is not corrupt which is very very tough to believe.
Putting brave face on CAG report and allegations against him Mr Raja claim that migration from auction route of NTP 94 to revenue share of NTP 99 is the yardstick on presumptive losses of Rs 1.65 lakh crores arrived caused to national exchequer. Here I want to ask Mr Raja the policies suggested in NTP 99 is not the last word from holy text. When losses were presumed to occur for exchequer by putting norms in letter and spirit, then why hadn't he suggested to Prime Minister Manmohan Singh and group of ministers for adopting new telecom policy, which could have garnered more revenue. Instead of this Mr Raja repeatedly giving reference of NTP 99 and justifying his action is most undesirable. Moreover former Telecom Secretary publicly claimed of suggesting Mr Raja for taking corrective measures and even expressed his reservation on few of the decision taken at that point of time. But Mr Raja being as boss of Ministry could have taken timely measures which makes us all proud from saving the losses caused to nation. Contrary beleaguered minister wasting time to save his skin putting entire onus on institutional aberration.
THe interview has enabled Raja to present his point of view. On balance it seems he is not to be blamed totally for the notional loss as he has only followed the precedence.Let not the readers be carried away by sensationlism that blinds truth
I think the minister Mr.Raja is technically correct in allotting the spectrum. But he should clear himself and the nation at large about the following: 1. If the Cut-Off dates are irrelevant in the First-cum-First-Served Policy, why did the ministry fixed the cut off dates? 2. Again, if the Cut-Off dates are irrelevant why did the ministry postponed the Cutoff dates? 3. If Telecom Policy 99 did not allow for auction for 2G allotment, what happened to 3G spectrum? 4. Why the ministry gave the licence to 85 companies, when they are found to be 'institutionally-incapable' of utilising the spectrum? 5. If the Govt intention for going 'First-cum-First-served' basis is to increase tele-density and cheaper caller rates, how were some companies are allowed to sell the spectrum alloted to them to other companies?[ For example, if govt builds multi-storied buildings for slum people to ensure proper housing to them and gives it to them on the FCFS basis, how we will be sure that those applied are really living in slum? also if those 'slum-residents'who got new houses alloted sell the houses to others at profit, cant we assume that entire housing scheme is a failure?(whether 3rd party benefitted or not, prima facie it is a policy failure)] 6. If it is so then why the Telecom Ministry is not accepting the Telecom Policy framed in 99 is a failure?[The failure is very natural and logical, since govt intention is not served] 7. Why the Telecom Ministry did not put any condition to the companies that got spectrum alloted, that they should not sell it to others on their own?[Since the Ministry had accepted that telecom regulation is the major concern and not revenue, this question must be answered] . Also, others also need to answer many questions:
1. CAG: if allotment of 12.6 MHz, could result in such a loss, why the office of CAG did not raise any issue when 38MHz and 21MHz were alloted? . CAG: How the CAG can calculaate loss on the basis of an after-event, i.e., 3G allocation? Can hindsight be used inthis case?3. CAG: As far as COnstitution, CAG cannot comment on alleged revenue loss. Why CAG is doing that here 4. Media: When the Parliament endorsed the TP 99 and had not amended it, how the Executives (MInistry) can be blamed for all alleged losse. 5. Media: Why the criticism, did not extend beyond Mr. RAja? What happenned to the actions of earlier telecom ministers who had done similar thing in the past?
6. Media: if allocation of 12.6 MHz is resulting in such a huge loss, why the media is not cared about losses that could have occurred in the remainig 50+ MHz allocation?
7. Is it because, others mentioned above are not holding the post and only Mr. Raja is holding the post? So does that mean, if actually any scam had happened, his mere resignation/removal will solve the problem?
8. Is it not possible that the Telecom-Cartel, since it is been broken, would be wanting the head of the guy who broke it?
9. Hon'ble SC: With out delivering a final judgement, how the Hon'ble Court can Convict the minister?
It is not Mr.Raja alone to answer this at all. It is the collective responsibility of the government as a whole and the Prime Minister should answer and that too he should have answered already even before the opposition parties protest in the parliament. It is He who should hold moral responsibility to answer the nation and not the individual(Raja) to be blamed.
Raja seems to have prepared this interview to the last detail. I have never seen any politician giving answers in so much detail and quoting article numbers one after another. I think this is a clear case of negligence from Raja. He used examples of subsidies in his interview. Yes, they are loss to exchequer. There is nothing notional here. Government has to buy at the market price. Subsidies are always a loss. There is no free lunch for anyone. Clearly he has taken up policies or chose some specific points in the law to allow him manipulate it.
It is sad to note that country is not sensitive to massive corruption. It appears people had accepted corruption is a part of life. Does India not have a leader who believes in moral values? The only difference between animal and human being is moralilty. If it is lost where will India go?
Reading Mr. Raja's 'interview' to Mr. R.K. Radhakrishnan, it is pretty obvious that this 'interview' is nothing but a prepared statement aimed at boosting the public image of Mr. Raja. Having been an avid reader of The Hindu for the last 2 decades, I am pained to see The Hindu take sides on an issue with political ramifications. Very Regretful, indeed.
Parliamentarians and law makers have not made any break-through in the allotment of 2G spectrum scam as yet. I think we have enough time to waste and give enough time to derail national loss. We must constitute a independent judicial committee approved by Supreme Court to find out whole aspets of lapses and to fix accountability. Democracy does not mean every citizen can take country for ride.
Why did he rely on the self certification of the companies (which did not qualify), when he talks so much about the adhering to the letter and spirit of the policy? Will Mr.Raja sell his personal property at old prices when the current market prices are several times higher than the old prices?Why did he not look after the interests of the country when he knew the repricing of the tariffs would secure more than Lakhs of crores rupees for the government. How come the companies who got the spectrum allotment sold part of their spectrum right in the next few months for hefty profits. As supreme court rightfully observed it is a pity Mr. Raja still continues to hold this position, which provides him every opportunity to supress all evidence against him. Why should the ordinary citizen remit taxes to the Indian government and have any ounce of patriotism when this Telecom minister, officials and PM will throw away lakhs and crores of rupees for their selfish ends.
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