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Raja caused Rs 1.76 lakh cr loss in scam: CAG

The report by the Comptroller Auditor General, assessing the 2G spectrum scam and the telecom minister's involvement in it, will be tabled in the winter session of Parliament.

A.M. Jigeesh | November 8, 2010 | Updated 12:22 IST

Union Telecom Minister A Raja has been blamed for causing a loss of Rs 1,76,379 crore to the state exchequer in the second generation (2G) spectrum scam, the Comptroller and Auditor General (CAG) has pointed out in its final report.

The report, accessed by Mail Today, will be placed before Parliament in the Winter Session starting on Tuesday. It says the entire process of spectrum allocation was done in an arbitrary manner.

"The honorable minister of communication and information technology, for no apparent logical or valid reasons, ignored the advice of the ministry of law and the ministry of finance, avoided the deliberations of the Telecom Commission to allocate 2G spectrum, a scarce finite national asset at less than its true value on flexible criteria and procedures adopted to benefit a few operators.

"TRAI, the regulator also stood by as a helpless spectator when its recommendations were being either ignored or misused," the report said, revealing Raja's personal involvement in the matter.

{mosimage}The Supreme Court had recently questioned why Raja was continuing as telecom minister.

Adding more fuel to the fire is the CAG report which has calculated the loss suffered by the government due to Raja's "arbitrary" actions.

"If price is calculated at 3G rates, which can also be taken as one of the indicators for assessing the value of 2G spectrum allocated to Unified Access Services (UAS) licencees in 2008, the value works out to `1,11,511 crore against Rs 9,013 crore realised by DoT. Similarly, for spectrum allotted under the dual technology, the value would have been Rs 40,526 crore, as against Rs 3,372 crore collected. The total difference in value worked out to Rs 1,39,652 crore," the report pointed out.

In May 2010, the Telecom Regulatory Authority of India (TRAI) had recommended charging the additional spectrum held by operators beyond the licensed quantity. The recommendation is under consideration by the government.

"In the event of these recommendations being accepted, the additional flow of revenue to the government would come to Rs 36,729 crore," the report claimed.

The CAG report, thus cited the figure of Rs 1,76,379 crore as the total loss to the exchequer. The report alleged that the telecom ministry did not make any efforts to modify the policy framework established in November 2003 to chart the course for implementation of a universal licensing regime.

"UAS licences, along with access to 2G spectrum, were given out in an arbitrary manner in 2008, at a price discovered in 2001, while 3G spectrum, a similar resource, was allocated at market price discovered through auction, generating revenue of Rs 67,718.95 crore," the report said.

It said the ministry did not consider a policy to ensure "optimal utilisation of spectrum" and "a method to discover its market price".

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