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 government,” but
also also substantiated them, further by citing additional crucial events.
The internal
assessment has been done on is of 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, being allocated to private
parties, took has taken become 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 PM’s statement in June 2011 that it was not
the CAG’s business to comment on policy issues and that they should limit
themselves 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 LoIs Letter of Intents and
undervaluing spectrum by selling it without auctions in 2008 at 2001 prices.
The report highlighted serious concerns over governance systems within the
Department of Telecom DoT and the consequent, undeniable loss to the national
exchequer. The CAG had 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.”
Appraising its
own conclusion of a loss, the CAG cites the Supreme Court judgment of 2.2.2012
which concluded that the actions of Mr. A Raja and officers of the DoT were
“wholly arbitrary, capricious and contrary to 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 Supreme Court has independently cited the same reasons,
for cancelling the licences, as the CAG had pointed out while concluding that a
loss had been caused to the exchequer.
Internal
appraisal
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 licencse 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 policy making was the
government’s prerogative.
The CAG’s final
analysis in its 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.”
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