2G spectrum scam - CAG report on 2G spectrum

The Comptroller and Auditor General (CAG) report on the Issue of Licences and Allocation of 2G Spectrum was tabled in Parliament on Tuesday, 16 November 2010. According to the CAG report, former Telecom Minister A Raja is responsible on many fronts for mishandling the allocation of the 2G spectrum in 2008 such as for violating guidelines, indulging in favouritism and costing the government Rs. 1.76 lakh crores. Congress and DMK had dubbed available information as “media speculation” for opposing it.

How DoT’s first-come-first-served policy was disobeyed, that is highlighted by CAG Report. According to report, 13 firms bagged the 85 licences by unfair means that are under TRAI inspection but Raja “randomly decided to issue Letter of Intents to all applicants that are submitted between March 2006 and 25 September 2007”, by this means applicants deprive the chance of a fair deal earlier.

Some crucial aspects especially the financial impact and the calculations of the CAG with respect to the financial impact of the 2007 decision of the department of telecom (DoT) to issue licences to several new entrants were detailed in the CAG report. According to the CAG report, 85 out of 122 licences were granted to disqualify applicants. According to the report, the 2G licenses were awarded in an unfair, random and inequitable manner. The department of telecom and several telecom companies' violations in the 2G spectrum award process has been charged in the report. According to the CAG report, there are some existing operators who have additional spectrum.

Rekha Gupta, Deputy Comptroller and Auditor General said, "The entry fee of 2001 adopted for migration of existing service operators was extended to the new operators without decision on determination of spectrum prices. The decision of the Cabinet in 2003 for DoT to discuss spectrum pricing and efficient allocation of spectrum with the Finance Ministry were ignored despite the finance ministry's advice due to which the UAS licences continued to be awarded in 2008 at a price discovered from a nascent market of 2001. The report also brings out that the procedures adopted by DoT for award of 122 new licenses in 2008 January had various flaws."

Video of CAG report on 2G spectrum in Parliament from youtube: