Friday, February 25, 2011

Prime Minister tries but fails to convince


Prime Minister Manmohan Singh in his structured interaction with television journalists recently justified his inaction on the massive irregularities in the allotment of 2G spectrum on the ground that neither the Union Finance Ministry nor the Telecom Regulatory Authority of India – not even the Telecom Ministry – had objected to the deal. He said, “If the Ministry of Finance and Ministry of Telecom both agree… and also that TRAI is an expert body; if all of them are of the same view, I did not feel I was in a position to insist on auctions.”

Of course, they were of the same view: that there was something wrong in the spectrum allotment and that corrective measures should be taken. The Prime Minister, therefore, should have insisted on auctions.

Interestingly, it was not just these organisations that had objected; even the Union Law Ministry had registered its protest over the manner in which the spectrum was being distributed by Mr Raja.

An overview of the developments that happened right under the Prime Minister’s benevolent gaze shatters the carefully constructed belief by Mr Singh’s spin masters, and now the Prime Minister himself, that he simply went by expert opinion and that he could not be held responsible for the presumptive loss to the public exchequer. Let us begin with the Law Ministry’s letter of November 1, 2007 to the Telecom Ministry – a missive that the Prime Minister very conveniently forgot to mention in his media interaction.

Then Law Minister H R Bhardwaj was perhaps the first senior Cabinet Minister to smell a rat. Apparently upset by the methodology adopted in allotting the spectrum, he wrote to the Telecom Ministry, “In view of the importance of the case (2G spectrum allocation) and various options indicated in the statement of the case, it is necessary that the whole issue is first considered by an Empowered Group of Ministers and, in that process, the legal opinion of A-G (Attorney General) can be obtained.”

The Law Minister was responding to an opinion sought by the Telecom Ministry on going ahead with the allocation of 2G spectrum licence on first-come-first-served basis and on prices fixed in 2001. An enraged Mr Raja wrote back – not to the Law Ministry but directly to the Prime Minister – questioning the idea of an EGoM to decide on spectrum pricing. He said in that letter, “The Ministry of Law and Justice, instead of examining the legal tenability of these alternative procedures, suggested referring the matter to EGoM. Since generally new major policy decisions of a department or inter-departmental issues are referred to the GoM, and needless to say that the present issues relate to procedures, the suggestion of the Law Ministry is totally out of context.”

This was on the morning of November 2, 2007. The same afternoon, the Prime Minister, perhaps alerted by Bhardwaj’s strong stand, wrote back to Mr Raja and cautioned him against taking any measures without informing him. “I would request you to give urgent consideration to the issues being raised with a view to ensuring fairness and transparency and let me know of the position before you take any further action in this regard,” Mr Singh directed his Minister. The Prime Minister also instructed him to adopt “correct pricing of spectrum and revision of entry fee”.

Thus, the Law Ministry registered its objection, Mr Raja dismissed it contemptuously, and the Prime Minister was all along in the loop. He did nothing. Towards the end of November the same year, came another shocker for the then Telecom Minister. The Finance Ministry got into the act, with then Finance Secretary D Subbarao sending a stinker to the Telecom Secretary on the issue. Mr Rao wrote, “It is not clear how the rate of Rs 1600 crore, determined as far back as in 2001, has been applied for a licence given in 2007… In view of the financial implications the Ministry of Finance should have been consulted in the matter before you finalised the deal.”

For good measure, Mr Subbarao added, “Meanwhile, all further action to implement the above licences may please be stopped.” The Finance Secretary was clearly expecting too much. Mr Raja had ignored the Prime Minister’s directive to adopt corrective pricing and revise entry fee; he was not going to be deterred by a Finance Secretary’s direction.

“If the Ministry of Finance and the Ministry of Telecom both agree…” – remember the Prime Minister’s clarification at the media interaction. Clearly the Finance Ministry had not agreed to the deal. Had then the Telecom Ministry agreed? We know that even it had not, if one goes by the assertions of senior Ministry officials. Neither then Telecom Secretary D S Mathur nor then Department of Telecom Member (Finance) Manju Madhvan was on the same page with Mr Raja. One had to leave in disgust while the other was swiftly replaced with then Minister’s yes-man after he retired. With senior officials in the Department of Telecom registering their protest to the deal, the only way to believe the Telecom Ministry was in agreement is to accept that Mr Raja alone was the Ministry.

And finally, was TRAI of the “same view” – as the Prime Minister asserted in his televised interaction? Of course it was not. Then TRAI chairman Nripendra Mishra had actually written to the Telecom Secretary Siddharth Behura – who had replaced Mr Mathur by then – objecting to the policy and the sudden revision of the cut-off date for submission of applications along with the requisite sum. When the government machinery went to town quoting a few statements of his that seemed to endorse the dubious methodology adopted, Mr Mishra went on record clarifying that his statements had been picked out of context. “Cherry picking”, is how he described it.

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