2G scam: No loss to the country, says Sibal

The government on Friday rejected the estimates of the Comptroller and Auditor General on the losses of  Rs 1.76 lakh crore (Rs 1.76 trillion) on account of allocation of 2G spectrum to telecom operators saying it "had no basis and was utterly erroneous".

Asserting that there were actually no losses to the exchequer, Sibal said "CAG has done injustice to itself and the Opposition is doing injustice to aam aadmi."

"We are extremely pained at methodology adopted by CAG for arriving at 2G spectrum (allocation loss) figures that have no basis," Telecom Minister Kapil Sibal told reporters in New Delhi.

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The Congress had on November 16, on the day the CAG report was tabled in Parliament, said that it would react on the CAG report after studying it.

Ever since the CAG report was made public, the Opposition political parties have been demanding a Joint Parliamentary Committee probe into the scam

The CAG report had indicted former telecom minister A Raja and said that the 2G spectrum allocation had caused revenue loss of Rs 1.76 lakh crore as the Raja had ignored the advice of Prime Minister Manmohan Singh and also that of ministries of law and finance, giving 'undue' benefits to private telecom operators.

The CAG highlighted that the entire process of allocation of Unified Access Service licences "lacked transparency" and was undertaken in an "arbitrary, unfair and inequitable manner," in the process "flouting every canon of financial propriety, rules and procedures."

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The 77-page report of the CAG tabled in Parliament said due diligence was not followed and even the recommendations of the telecom regulator TRAI were "not followed in spirit".

The report said the "presumptive" loss caused to the exchequer through spectrum allocation to 122 licencees and 35 dual technology licences in 2007-08 was Rs 1,76,645 crore. It pegged the figures on the basis of 3G auction held earlier this year in which the government mopped up over Rs 67,000 crore (Rs 670 billion).

It said there was an "imperative need to fix responsibility and enforce accountability for the lapses highlighted in the audit report."

Elaborating on the lapses and irregularities, the government auditor said that Prime Minister Manmohan Singh had "stressed on the need for a fair and transparent allocation of spectrum" while the ministry of finance had sought for the decision regarding spectrum pricing to be considered by an EGoM (Empowered Group of Ministers).

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"Brushing aside their concerns and advices, the Department of Telecommunications, in 2008, proceeded to issue 122 new licences for 2G spectrum at 2001 prices, by flouting every canon of financial propriety, rules and procedures," the CAG said.

The DoT also did not do the requisite due diligence in the examination of the applications submitted for the licences, leading to the grant of 85 out of 122 licences to the "ineligible applicants" as all these firms did not have stipulated paid-up capital at the time of application.

Further 45 out of 85 licencees were issued to companies which failed to satisfy conditions of main object clause in the memorandum of Association (MoA), it said.

The CAG said the process of giving dual technology licences to leading telecom firms including Reliance Communications and Tata Teleservices "lacked transparency and fairness," and equal opportunity was denied to other similarly placed operators who could apply for use of dual technology only after formal announcement of the policy.