A false ring to it
There has been much debate and discussion on the scams in the telecom sector over the last many months — but it’s time now for real action. The 2G cellular licensing ‘scam’ must be investigated as a serious white collar crime, writes Rajeev Chandrasekhar.india Updated: May 17, 2010 22:50 IST
There has been much debate and discussion on the scams in the telecom sector over the last many months — but it’s time now for real action. a) Time to identify the culprits and wrongdoers and to punish them; and b) to recover the money. Scams like this cannot simply be the subject of Parliament debates and disruptions and one of the many breaking news in media — scams are visible signs of dysfunction and white collar crime and the focus now must be on treating this as a crime, identifying the culprits and ensuring that our system of checks and balances prosecutes them as per the law. To make the rhetoric coming out of Delhi — of being an economic superpower — a reality, we need to act like one and not like a banana republic.
The background to this crime is pretty simple to understand. With the current set of 3G cellular licence tenders yielding the government over Rs 10,000 crore each (and the bidding isn’t done yet) amidst a general economic environment that isn’t really still the best (if the international economy was booming, as it was in 2007, the proceeds and value would’ve been higher) — the big question that must now be asked is this: How did the 2G cellular licences, that were sold from 2004 to 2007 onwards, get the government only Rs 1,500 crore each? Is it because the government chose not to float tenders for these and opted for a more dubious route?
The answer to that question is an obvious and resounding yes. What is the loss to the government? Assuming that these 2G licences were to be valued at marginally less than 3G licences at Rs 10,000 crore each (though there’s no evidence pointing to a need to assume 2G licences as cheaper than 3G, and using the secondary transactions of Unitech and Swan as benchmarks), the loss to the government is in the region of Rs 50,000 crore. That’s a realistic estimate and doesn’t include the spectrum given as follow-on spectrum to existing telecom companies. This loss to the government is a direct gain to a handful of corporates. This is swindling by any definition. That is why it’s necessary to start referring to this as a crime and not a scam anymore. The word scam has been overused and increasingly sounds trivial and flippant.
The crime is clear — swindling the government of Rs 25,000 crore or more. Now the question to be asked is, who are the perpetrators of this great swindle? While the cast of suspects who can and should be indicted for these will include all the obvious political actors i.e. the ministers of telecom who have chosen to give away these licences, starting from 2004, it is also important that independent regulators like the Telecom Regulatory Authority of India (Trai) and bureaucrats be held to account. While we are almost reconciled to the bureaucracy being party to this, the independent regulator, Trai, was created by a statute of Parliament precisely to ensure transparency in the telecom sector and to protect the sector and all its participants from political shenanigans that are almost natural to any lucrative contracting and licensing process in our system.
The current Minister for Telecom A. Raja has repeatedly relied on Trai’s recommendations as justifying his actions. In many cases he had flouted the Trai recommendations, but in this case he used the same recommendations as per his needs. The investigation must look into whether the regulators, Trai, were at any time willing accomplices to the current, or any previous minister’s, political shenanigans.
If this government is serious about treating this as a crime then two things need to be done:
* The swindled money must be recovered from the beneficiaries of the swindle. The significant monetary gains that have accrued to these few corporates must be recovered either through additional fees/levies or taxes.
* An investigation must be launched to identify all the culprits, followed by due process under the existing laws.
This investigation will also be a much-needed review of the institution of independent regulators. The practice of stuffing them with retired or serving bureaucrats has made them a second bureaucracy, with little or no will to establish and affirm their independence from politics. And when an independent regulator becomes a willing participant, or silent observer, of the fraud, then there is a very serious problem. It’s akin to the police or a judge being party to, or silent observer of, a crime. In such a case, the punishment that is to be meted out needs to be exemplary, to send a message to the rest of the regulators. That is why a thorough investigation into the entire licensing crime and the role of the regulator is justified and the objective must be to identify the perpetrators and punish them.
Rajeev Chandrasekhar is a Member of Parliament
The views expressed by the author are personal