In a stunning political misadventure, Union Minister for Communications and Information Technology Kapil Sibal has come out as Apologist-in-Chief for the multi-billion dollar scandal of 2G-spectrum allocation in 2008 to favoured parties, including fronts. He chose to fly in the face of facts as well as good governance values in a brazen attack on the report of the Comptroller and Auditor General. At a time when the Central Bureau of Investigation is pursuing the criminal case under the watch of the Supreme Court, and a one-man committee is looking into the procedures and policies in operation in the Department of Telecommunications from 2001, Mr. Sibal has proclaimed there was no loss to the government from the spectrum allocation on a ‘first-come, first-served basis.' The CAG calculated four sets of figures of presumptive loss to the exchequer: Rs.57,666 crore on the basis of sale of equity by the new licensee Swan; Rs.69,626 crore on the basis of sale of equity by Unitech; Rs.67,364 crore on the basis of the rate offered by S Tel; and Rs.176,645 crore on the basis of the 3G auction. True, the 2G allocation was in 2008 while the auction of 3G, which is far more efficient than 2G, was in 2010. Even so, how does Mr. Sibal explain the grant of 2G licences in 2008 at the price fixed in 2001 when the intervening years had witnessed a quantum jump in subscriber base? As the CAG report pointed out, many of the new licensees of 2008, with no experience in the telecom sector, were able to attract substantial amounts of Foreign Direct Investment on the strength of getting licences and access to spectrum. Indeed the CAG report, anticipating many of the lawyerly objections raised by Mr. Sibal, argued that the value of the 2G spectrum given in 2008 could only be “presumptive” because the various determinants such as scarcity value, competition, the number of operators, and the growth of the sector would, “depending upon the market situation… throw up the price that it commands at a given point of time.”
If Mr. Sibal's aggressive defence proves anything, it is that the United Progressive Alliance government has a lot to hide. As the 2007-2008 correspondence on the contentious issues between Union Communications Minister A. Raja and Prime Minister Manmohan Singh (published in The Hindu on December 23, 2010) reveals, Dr. Singh was fully in the picture contemporaneously. The Prime Minister, whose personal integrity is beyond question, failed to act to stop what he was suspicious about — the lack of transparency in allocation and the under-pricing of the entry fee for 2G spectrum, “which is currently benchmarked on old spectrum auction figures.” Mr. Sibal's other defence is pointing to the revenue loss calculations from telecom policy decisions taken by the National Democratic Alliance government led by the Bharatiya Janata Party. This only strengthens the case for a comprehensive enquiry by a high-powered Joint Parliamentary Committee into spectrum allocation right from 2001. Nothing less will do.
