Dethroned communications and IT minister A Raja flouted procedures, changed a cut-off date for submitting 2G licence applications, tinkered with the first-come-first-served policy and issued licences to the companies that were not eligible.
These are among the findings of the independent report on the scam involving the underpricing of 2G (second generation) telephony spectrum by the Comptroller and Auditor General of India (CAG) in its report tabled in Parliament on Tuesday.
The Raja-led department of telecommunications (DoT) arbitrarily advanced the cut-off date for 2G applications to September 25, 2007 from October 1, 2007, helping some firms ward off competitors who missed the date, the CAG said. The CAG has calculated loss to exchequer was to the tune of R170,000 crore from underpricing and irregularities in selling 2G spectrum He noted that the tinkering with the date was clearly against the recommendations of the Telecom Regulatory Authority of India (TRAI) that abolished a cap on the number of players.
CAG, the government’s chief auditor, said DoT’s moves created an artificial ceiling in violation of TRAI guidelines.
Also, the issue of licences lacked transparency as the DoT, in fact, issued licences to ineligible operators. As many as 85 of the 122 licences issued in 2008 were found to be so. “Since these companies did not meet the eligibility criteria set by the DoT on the date of their application, their applications should have been rejected and they should have been asked to apply afresh...,” the CAG said.
Raja also flouted the first-come-first-served (FCFS) policy for allocation of spectrum. Raja had assured the Prime Minister that the processing of licence applications would be based on the policy.
“However, DoT deviated from the policy in letter and spirit, defeating thereby the sanctity of the avowed FCFS policy,” the CAG observed.
It said the ministry “arbitrarily” and simultaneously issued letters of intent in a manner that deprived those who had given their papers in earlier of their seniority.
“Thereafter the importance of the date of submission of application in the FCFS Policy was altogether removed by giving precedence to the date of compliance to the LoIs. This means that applicants who had submitted the applications even a year later were given the chance of getting precedence, ..if they could comply with the LoI conditions earlier.”
Raja did not consult Telecom Commission, the highest decision maker in communications ministry, when the new licences were allotted. He also ignored advice of the Prime minister, law ministry and the finance ministry, CAG said.