Monday, December 20, 2010

The corruption termite bites India big time

The corruption termite has bit and continues to bite India big time. This time it is the largest in money post independence - $40 billion. Unfortunately, it is Congress again at the Center of the controversy. In 1980's corruption in Bofors case made Congress lose power. In 1996, P,V. Narasimha Rao corruption cases made Congress lose power. Now, Manmohan Singh stands to lose power. However, a weak BJP is no threat to Congress. As long as journalists like  Sheela Bhatt, Vir Sanghvi - all these continue to idolize Congress and claim that is the only party of governance, Congress will be the darling. It is not as if BJP is clean as it claims.  The hope Manmohan Singh being the PM which so far lit up the heart of an Indian is today shut off. I am amazed at how Dr. Singh could not act and allowed his government to run like that of Narasimha Rao govt.

First, it was the CWG games scam, then came housing scam - how many more to go - Mr. Singh.? The real India has 2 sides. On one hand, it is growing like never before with 9% growth and all the world turned towards us, and on the other hand the corruption continues to grow and swell too.

The intention of writing this article is to give readers a chance to understand how Manmohan Singh allowed the biggest corruption to take place under him and he did not act at all. His deafening silence is admission of his guilt. PM is not corrupt, but by not acting against the corrupt (despite 3 times notice served to A. Raja), he admits his guilt. Let us study how all it happened in simple terms.

First, prior to A. Raja becoming the Telecom Minister, the policy of First come first serve basis (FCFS) was followed to allot new entrants who wanted to provide cell phone service. Basically, according to FCFS policy, the date of application by the new entrant was the criteria in processing the application. Based on the dates, all the entrants/bidders were auctioned as per the prevailing market price of the spectrum. 

However, page 66 of the Comptroller and Auditor General (CAG) report shows how Raja changed the system of FCFS without the approval of The Cabinet, Telecom Regulatroy Authority of India (TRAI), Finance Ministry  and Empowered Group of Ministers headed by Pranab Mukherjee. He used the criteria of agreement to Letter of Intent (LoI) as the criteria instead of the application date. The letter of Intent (LoI) is the letter given by the Telecom ministry as a document of agreement stating that the operator can provide the service after paying the respective fees. Before giving any LoI, the Minister studies the company profile, takes the recommendations of TRAI and Department of Telecommunications (DoT). All these rules were flouted by A. Raja

Let's look back as how events unfolded. 

Around June 2007, 575 applications were received who wanted to buy 2G spectrum to provide cell phone service in the booming telecom market in India. At that time the subscriber base had jumped to 350 million from just 4 million in 2001. Although 575 applications were received the spectrum was scarce and only 150 applicants could be alloted the spectrum. However, A Raja chose to play with the system and he decided to allot the spectrum to only those companies which he had prior contacts with. Real estate companies which had no prior telecom experience started applying. The queue was getting formed illegally and Raja now decided to favor some companies over the other. Spice, Idea who were waiting to provide services in Delhi and Maharashtra and applied in 2006 got pushed to the end while SWAN and UNITECH who applied in 2008 got shortlisted. The spectrum was sold to them at 2001 prices instead of the current market price.

When this came to the notice and Raja had still not issued the LoI, The DoT sent a letter on Oct 27, 2007 asking Raja to follow the auction mechanism. 

The PM Manmohan Singh also shot a letter on Nov 2, 2007 asking Raja to follow the transparent auctioning mechanism. However, Raja continued to write tricky and clever detailed letter - that following such a mechanism is harmful to telecom sector.

Dec 26, 2007 - The PM acknowledges receiving the letter and did not even send an objectionable letter mainly because DMK pressurized the PM not to act - A brazen act of cowardice. I question Sonia Gandhi as to why and how she could tolerate all this. This is where PM's mistake lies.

Dec 27, 2007 - DoT warns Raja again on issuing LoI to the new companies and asking to stop violating all norms that were in the rule book. 

Dec 31, 2007 - Finance Secretary retired and the LoI given by Raja to Finance Ministry to sign did not get approved.

By Jan 10th, 2008 - the new Finance Secretary is brought in and the LoI's signed. This was not brought to the notice of Finance Ministry or even the EGOM headed by Pranab Mukherjee taking everyone by surprise.

How did this decision go through? How could Manmohan never follow up this? Was he under constant pressure from DMK? What about Sonia Gandhi. It can't just happen that she is not aware of these things. How could she turn a blind eye? 

Despite giving licenses to 125 companies, only 35 operate till now. The remaining are not even in the market. So, who were these companies who were given spectrum and the spectrum at 2001 prices? Who is accountable for this money which runs to 1.76 lakh crores or $40 BILLION - enough to fund the entire country's defense, road and pro-poor schemes for almost 4 years.

This is how CAG report says: For more, also read this:

The entire process of allocation of UAS (Unified Access Service) licences lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner. The Hon'ble Prime Minister had stressed on the need for a fair and transparent allocation of spectrum, and the ministry of finance had sought for the decision regarding spectrum pricing to be considered by an EGoM. Brushing aside their concerns and advices, DoT , in 2008, proceeded to issue 122 new licences for 2G spectrum at 2001 prices, by flouting every canon of financial propriety, rules and procedures," the 77-page report says. 
Source: Times of India - click here

When it so happened that 2 companies SWAN and UNITECH declared that they sold 45% and 60% of their stake to Etislaat and Telenor respectively - the TRAI and the CAG were alarmed to see that without a single customer the spectrum that they purchased was sold to foreign companies. The profit these companies made is the amount that had to be paid to the Govt. Many of the recipients of the  spectrum are fictitious companies. Many of them didn't even qualify for bidding.

The Supreme court came down heavily on Mr.Singh and asked him why he did not bother to answer the PIL filed by Subramanyam Swamy and why he acknowledged Raja's letter. CLICK HERE

The PM doesn't want to answer. Can his silence mean his guilt? Clearly, Manmohan has failed. His responsibility to act has failed and his intellect is of no use to either this country or himself. How can the media never blame him for anything? Sonia Gandhi asks ministers to resign and questions BJP that they cannot do the same. If BJP cannot do the same, it is their problem. But as a lady whom the entire media calls the Goddess - a saint - durga maata (I hate such journalists who idolize Sonia. I will understand Indira, but never Sonia. Sonia doesn't even come 1% close to Indira Gandhi's life style), what is she doing to prevent corruption in the country. It is time for you to act Madam, not to accuse BJP. Talk what you would do against these people. Merely, resignations are not going to help. A month ago, she gave a speech (click here) admitting that corruption has reached every sphere of India and she is worried about it. Does she forget that culture of corruption started during the Gandhi family that ruled this country for 50 years? Was it not her husband Rajiv Gandhi who had been involved in Bofors scam and yet no conviction has been made. For 5 years that Congress was in power during Narasimha Rao, what did Congress do? How will the Congress President act against her own party and government?


Anonymous said...

It is useless to expect anything from these parties and politicians. Sonia GANDHI has a zero IQ Level.
One needs to look at the qualification of the people heading the party in power. Sonia is just a lame duck with no insight and wisdom. Actually she deserves the title "gungi gudiya" more than anyone else.

Anonymous said...

to solve this, we the people should participate in the politics actively instead of complaining. it is the only way.