The CAG, after completing this month a detailed
‘internal appraisal’ of two of its most high-profile reports, has not
just stood by its findings “regardless of media comments and the
statements made by senior functionaries of the government,” but also
substantiated them, citing additional crucial events.
The
internal assessment has been done on its reports on the 2G spectrum
scam of November 2010 and Civil Aviation (Air India) of September 2011.
The
entire issue of irregularities in award of government
contracts/licences in general, and specifically for scarce natural
resources, to private parties, took centre stage. It gained further
momentum with the arrest of the former Telecom Minister, A. Raja, and
several senior industry leaders, starting February 2011.
Later, the
debate took a new turn after the Prime Minister’s statement in June 2011
that it was not the CAG’s business to comment on policy issues and that
it should limit itself to the mandate given under the Constitution. It
is these events that have led to a rigorous internal self-appraisal by
the CAG.2G scam report
Where the 2G scam is
concerned, the November 2010 report, apart from highlighting a massive
loss to the exchequer, flagged violations in policy implementation such
as illegal advancement of the cut-off date, manipulation of the first
come, first served procedure, undue haste in granting Letters of Intent
and undervaluing spectrum by selling it without auction in 2008 at 2001
prices. The report highlighted serious concerns over governance systems
within the Department of Telecom and the consequent, undeniable loss to
the national exchequer. The CAG provided 3 estimates based on specific
evidence — 3G auctions and the Swan and Unitech transactions — along
with a caveat that “the amount of loss could be debated.”
Internal appraisal
Appraising
its own conclusion of a loss, the CAG cites the Supreme Court judgment
of February 2, 2012 which concluded that the actions of Mr. Raja and
officers of the DoT were “wholly arbitrary, capricious and contrary to
the public interest, apart from being violative of the doctrine of
equality. The material produced for the quote showed that the Minister
for C&IT wanted to favour some companies at the cost of the public
exchequer.”
The CAG has highlighted that the court
independently cited the same reasons, for cancelling the licences, it
had pointed out while concluding that a loss had been caused to the
exchequer.
Criticised for having estimated a
staggering Rs 1.76 lakh-crore revenue loss — as a result of auctions not
being held for 2G — which the government has dismissed as being a
presumptive figure, the CAG now says, “it is only fair to point out that
TRAI’s latest [May 2012] collation of reserve price for 2G spectrum
approximates the calculation in CAG [2010 2G spectrum] report.” In fact,
the appraisal highlights that “TRAI has recommended a reserve price for
2G spectrum of Rs. 18,000 crore for a pan-India licence for 5 MHz
spectrum which is higher than the 3G value of Rs. 16,750 crore for 5 MHz
used by the CAG for arriving at a [loss] figure of 1,76,000 crore.”
The
CAG’s internal assessment concludes that its 2G report clearly stated
that it was only examining the “implementation of policy” and that
policymaking was the government’s prerogative.
In the
final analysis, the CAG says, the internal assessment points out that
its 2G report “had highlighted the unjust and opaque manner of
allocation of scarce natural resources” and that “the Supreme Court
having taken note of the issue has directed that natural resources being
the wealth of the people, the state necessarily needs to adopt a mode
of auctions to ensure a just distribution of natural resources.”
The Hindu
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