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CAG asks DoT to explain concessions to telcos

business Updated: Apr 04, 2014 08:16 IST
M Rajendran

The Comptroller and Auditor General (CAG) has issued a final warning to the Department of Telecommunications (DoT), asking it to reply within 10 days for failing to explain lapses in how it charged telecom firms for usage of spectrum and the way it handed out concessions that appeared to have benefited certain companies, after the DoT failed to respond despite two reminders.

Spectrum refers to the frequency an operator is allowed to operate in and its allocation and usage charges are a major source of income for the exchequer. The new lapses involve alleged inconsistencies in the way the allocations were made, the fixing of annual ‘spectrum usage charges’ (SUC) and concessions given to certain firms.

After being alerted in mid-January, DoT is yet to explain the three instances of “policy lapses” pointed out by the CAG.

However, in February 2014, DoT firmed up the SUC, even as it maintained silence on the matter in front of the CAG.

The CAG had sent two reminders in the second week of March but the department is yet to reply. Now, the auditor has given a 10 day-deadline to the department in a letter sent to telecom secretary MF Farooqui.

“If no reply is received within ten days of the receipt of letter, it will be construed that DoT has no comments to offer and the case would be further processed (accordingly),” RB Sinha, director-general of audit (post and telecommunications) said in the letter, a copy of which is available with HT.

“The computation of loss to the government will be assessed only after DoT’s response,” said a CAG official.

On January 16, 2014 the CAG wrote to DoT asking it to explain what it found as “major inconsistencies in the allocation of additional spectrum to telecom service providers and fixation of rate for spectrum usage charges”. There has been no reply to the letter yet, despite a reminder sent on March 12, 2014.

Similarly, a CAG letter sent on January 21, 2014 seeking explanations of the “hasty decisions” giving concessions to certain firms without independent verification of their claims has also gone unanswered. CAG officials alleged these resulted in undue benefits to certain operators.

Calls to Farooqui went unanswered and DoT officials said he was busy attending an international conference in Dubai.