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.