Gone are the days of scams that ran in few thousand crore of losses to the exchequer. Today, we have the baap of all scams to hit the headlines – the 2G Spectrum scam that allegedly has been masterminded by Union Minister of Telecommunication, A. Raja and that overshadowed the other big scam of this year – the Commonwealth Games scam.
As compared to the 2G Spectrum scam, earlier scams like the stock market scams of the 90s at the hands of Harshad Mehta and later by Ketan Parekh, the stamp paper scam masterminded by Abdul Karim Telgi, the fodder scam, the Satyam scam and lately the IPL scandal followed by the recent Commonwealth Games scam, all of these scams put together pales comparatively in front of the 2G Spectrum License scam.
Everything would have been under wraps if the Income Tax Department wouldn’t have taken the now disputable (on moral grounds) liberty of tapping the phones of Nira Radia, a political lobbyist and thereby coming to terms to one of the biggest scandals to hit the country in recent times. What followed next was the publishing by a couple of media of the transcripts of the conversation that Nira Radia had with some big corporate heads as well as politicians and senior journalists that hinted of their role in the scam. The story exposed the biggest scam of this country to it general public and the world at large.
So what exactly is the 2G Spectrum scam? In the year 2001, when the number of mobile connections was minimal (about 50 lakh subscribers), the government through its Ministry of Telecommunications had allotted the spectrum license to private players on first come first basis rather then through an auction to ensure a healthy growth of mobile market. By 2008, the mobile market had witness a tremendous growth and by end of March 2008, the number of mobile phone users number to about 37.5 crore!
However in 2008, when the government once again opened its door for the release of the 2G Spectrum, Telecom Minister A. Raja, ignored the TRAI order of auctioning the Spectrum License keeping in mind the prevailing market price and once again went ahead repeating the governmental procedure of 2001 and allotted the 2G Spectrum on a first come first basis.
It was wildly known that lot of private players from the country as well as from outside were seriously considering expanding their mobile telephony service in India seeing the growing user base. Hence it came as a surprise when the Minister offered the 2G Spectrum on a first come first basis and at the same price as of 2001. Nine companies were allotted the 2G Spectrum and the total revenue stood at around Rs.10,772 crore from the spectrum license sale far less then what the revenue that could have been generated if the Ministry of Telecom had opted for an auctioning of the 2G Spectrum Licenses in the open market.
The recorded conversations of Nira Radia with top corporate honchos, politicians and senior journalists coupled with investigations by the government investigative bureaus give a clear hint of Telecom Minister A. Raja’s dubious role along with those of a host of other people, in the spectrum scandal of 2008. It is alleged that A. Raja restricted the number of entrants for the 2008 allocations to favour a few private players. He also allotted the spectrum at the price fixed in 2001 though the market has grown tremendously and the TRAI had advised to conduct an auction and allot the 2G Spectrum to the highest bidders.
The end result was that the spectrum scam is said to have dented the exchequer by almost Rs.1,00,000 crore, a no small amount indeed. If an auction would have been conducted, it would have been a fair and transparent allocation process without favoring a few private parties and at the same time brought in huge revenue for the exchequer.
However A. Raja strongly condemns any wrong doings on his part. According to him, the allocations of 2G Spectrum in 2008 was conducted as per the government norms and he had followed the procedures of the earlier allocation conducted in 2001. He defends the allocation on the first come first serve basis saying he wanted the end consumers to enjoy the low pricing by the network service providers. If an auction would have been held, it would have meant higher call charges for the common man. However, the government is not reading anything into it and has ordered a massive enquiry into all the people involved in this scam and not just A. Raja.
To put things into perspective, since 2008, out of the nine companies which were allotted the 2G Spectrum, a couple of them have sold high stakes in their companies to external players at three to four times the costs of the purchase of the 2G Spectrum Licenses. Swan Telecom (a company that had no prior mobile business experience) which brought the 2G Spectrum license to operate in 14 circles for a mere Rs.1537 crore, six months down the line sold 45% of its share to another private player for Rs.4,050 crore!!!
United Telecom was another company that acted in a similar manner. Not bad an investment in the 2G Spectrum when the returns are anywhere near 700% and that too within a matter of six months of purchasing the license. No wonder the government is seething in anger at such large scale losses to the exchequer.
According to the reports filed by the Controller and Auditor General (CAG) of India, lot of irregularities and wrong doings have been documented by CAG in this process of allocating 2G Spectrum by the Telecom Minister A. Raja who in the face of all the allegations, was forced to step down as the Telecom Minister and an legal enquiry generated against him.
According to A. Raja, the case against him in the Supreme Court is sub judice and he is innocent of any wrong doings. However, whether the Radia tapes will have any bearings on this case and to what extent, only time will tell. However, the 2G Spectrum scam put into limelight a whole bunch of motley crew – few politicians who had the authority to sell the 2G Spectrum licenses, the big companies who were the buying these licenses and senior media scribes who were the runners between the politicians and the corporate to finalise the deals.
For now, A. Raja can breathe easy as whatever damning evidence that the media has printed in the form of the Radia tapes transcriptions clearly give no evidence to support the theory that there has been irregularities in the conduct of the 2G Spectrum license allocation by him. But on the other hand, the investigations by the government’s own investigating agencies since the last few months indicate a far gloomy picture for the ex Telecom Minister.
Whether the dubious title of Baap of all scams stays on him, we’ll simply have to wait and watch!