2G scam: No auction, hence no basis to calculate loss, says PM
NEW DELHI: Prime Minister Manmohan Singh seemed unwilling to contradict Telecom Minister Kapil Sibal's claim that there was "zero loss" from the allocation of 2G spectrum saying that it was difficult to calculate the actual loss in the absence of an auction.
"The then existing policy of the government was that auctions should not take place and if auctions have not taken place, then what is the basis to calculate the loss? There are various estimates but you have to assess what is the right magnitude after asking yourself what was the right price," the prime minister told during his interaction with editors of the electronic media. "CAG (Comptroller and Auditor General) itself has said that it is a presumptive loss," he added.
The statement comes a day after the CBI chief AP Singh, told Parliament's Public Accounts Committee that the loss to the exchequer could be around Rs50,000 crore. He even said that this estimate could be revised after the investigations are complete.
On his part, the prime minister, however, insisted that the loss on account of 2G spectrum allocation would vary as per the methodology used for calculation.
The prime minister tried to delink himself from the controversy. He claimed that the 2G issue was "never brought to me or the Cabinet" and the decision to allocate spectrum licences in 2008 was entirely that of the telecom minister. "In allocation of 2G spectrum, the issue of licences was never brought to me or the Cabinet. That was the decision of the (then communication) minister," he said, adding that A Raja had assured him of "complete transparency" on the issue.
Singh said he had written to Raja on November 2, 2007, asking him to look into a number of issues and ensure that they are dealt in an equitable, fair and transparent manner. "One of the issues that I asked him to look into was the possibility from the legal and technical angle, of having an auction of spectrum." However, Raja wrote back to him almost immediately saying that he had been absolutely transparent in dealings and would continue to be so in the future. "You have my assurance that I have done nothing and I will do nothing that will be inconsistent to the promise that I have made to you," Singh said, citing Raja's letter.
According to the prime minister, Raja also told him that the Telecom Regulatory Authority of India (TRAI) and the Telecom Commission were not in favour of auction of 2G licences. "He (Raja) said that if we had auction it would not give a level playing field for newcomers because the existing players have got the spectrum free of charge up to a certain mega hertz," Singh said, adding that the minister, in a subsequent communication, mentioned that although he was agreeable to auctioning 3G spectrum, "with regard to 2G spectrum, he was very clear that we should stay with the then existing approach."
Singh said the issue was also discussed with the Finance Ministry as the 2003 Cabinet decision required the pricing and allocation of spectrum to be settled between the finance and telecom ministries. Though the Finance Ministry initially asked for a high price for 2G spectrum, after many discussions, it agreed with the Telecom Ministry's view that they would have to live with the then prevalent system," especially with regard to the amount of spectrum built and embedded in the licence agreement."
"So this is the background why I did not proceed with the matter of spectrum allocation....If the Ministry of Finance and the Ministry of Telecom agree and...also TRAI and Telecom Commission....were of the same view, I did not think it was right to insist that auction was the right way," the prime minister clarified. On sale of spectrum by some companies after being allocated the same, Mr Singh said he was not aware of their motives.
"I do not know....what was the motivation of the people who got spectrum but I do know that as far as the basic policy is concerned, I thought that was then the prevailing practice and Raja was continuing that policy.
"As far as who gets licence, the first-come-first-serve policy, how it is implemented, that was never discussed with me, licences were not a matter which ever got referred to me or the Cabinet that was a decision exclusively of the telecom minister.
- Economic Times