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Wanted 2G entry fee hiked to mop up Rs. 35,000 cr: ex-cabinet secy

PTI  New Delhi, October 18, 2012
First Published: 21:44 IST(18/10/2012) | Last Updated: 21:47 IST(18/10/2012)

In a revelation, former cabinet secretary KM Chandrasekhar on Thursday said he had recommended to Prime Minister Manmohan Singh a hike in entry fee for 2G spectrum allocation that would have mopped up revenue of Rs. 35,000 crore, about four times more than actually generated.

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Deposing before the Joint Parliamentary Committee (JPC) examining 2G spectrum scam which was boycotted by BJP members, Chandrasekhar said he had made the suggestions in a letter to the Prime Minister on December 4, 2007.

Chandrasekhar, who was the cabinet secretary between June 2007 to June 2011, said the Prime Minister had asked him to look into the issue of financial implications following media reports and letters written to the Prime Minister's Office regarding 2G spectrum.

"He (Chandrasekhar) suggested a possibility of enhancing the entry fee keeping in view factors like increased tele density, inflation and increased consumber base...if 2001 price is revised to some level, what will be the revenue implication," JPC chairman P C Chacko said after the meeting.

"If there is auction, if there is no auction, what will be the revenue implication. It can be roughly Rs. 35,000 crore based on indexing the 2001 fee figure (Rs 1,658 crore) to 2008, considering various aspects," Chacko said quoting the former cabinet secretary's note to the Prime Minister.

The 2G spectrum was allotted in January 2008 at the entry fee of Rs. 1,658 crore and total revenue generated was about Rs. 9,000 crore.

When JPC members asked Chandrasekhar as to why his suggestion was not accepted, he said the PM had sought opinions from various quarters and revenue implication was not the sole criteria for reaching at conclusion.

"As it is, the prerogative to take a decision lied with the DoT," Chacko said basing his statement on Chandrasekhar's contention.

The former top bureaucrat said since the department of telecommunications was administrative ministry on the issue, it was up to it to take a decision based on existing policy.

At the same time, he insisted that the fee, on which the allocations were made, did not amount to any loss as it was a policy decision.

"If an allocation is made below the existing price, it may lead to revenue abandonment," Chacko said quoting Chandrasekhar.

On the controversial March 25, 2011 note which suggested that the then finance minister P Chidambaram could have insisted on auction, Chandrasekhar told the JPC that the note was entirely an internal document of the finance ministry.

He said the telecom secretary had written a letter in January, 2011 with the approval of the then telecom minister suggesting a coordinated approach in submissions in view of the Public Accounts Committee discussing the CAG report on 2G scam.

Chandrasekhar said after he discussed the issue with the Secretaries concerned, it was found that various documents relating to 2G allocations were kept in separate files of the finance ministry due to which a cohesive picture was not available.

The finance ministry was asked to prepare a chronology of events which would help officers appearing before PAC and other fora to present a coordinated picture.

"It was not expected that there would be any inputs from the cabinet secretariat... I never asked for or saw the note prepared in the matter by the ministry of finance since I considered it be an internal note of that ministry," Chandrasekhar told JPC in a written submission.

He also told the JPC that "suggestions" and "presumptions" mentioned in the note could have been avoided.

On the issue of boycott of JPC proceedings by BJP, Chacko ruled out calling the Prime Minister as a witness and said the members would discuss the issue of calling finance minister Chidambaram in the next meeting on November 8.

"If there is a consensus on calling of a minister, we may refer the matter to the Lok Sabha Speaker," he said, adding that rules disallow calling the Prime Minister to depose before a Parliamentary Committee.

When asked if a consensus eludes the JPC, he said then a majority view would be held. "But as per rules, there should be a consensus," he said.

While BJP wants Singh and Chidambaram as witnesses, CPI and CPM are insisting on summoning the finance minister alone. During the last meeting, BSP too had supported the suggestion.

Chacko also slammed the BJP members in the panel of being "unfair" to him by terming him as biased.

BJP members in JPC for the second time abstained from the panel proceedings today saying unless the Prime Minister and Chidambaram are called before it, the Committee will not be able to deliver a fair report.

BJP spokesperson Nirmala Sitharaman said here that the party maintains its position of not attending the panel proceedings till the Prime Minister and the finance minister are called before it.

On earlier two occasions, they had stormed out of the meetings accusing Chacko of behaving like a Congress spokesperson and charging Congress members in the panel of using foul language.


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