Cancel the licences and auction them for a start

NOW THAT the ugly underbelly of the Great Indian Telecom Revolution has been publicly exposed, the question being frequently asked is whether the mess can be cleaned up. And if indeed it can, whether it actually will be. The spectrum scam has blown up in the face of Prime Minister Manmohan Singh and the ripples of this scandal on the country’s political economy will not disappear in a hurry.

Under the circumstances, the government would be well advised to initiate prompt and stern punitive action against those responsible for causing the biggest-ever loss to the exchequer. What this would entail would be the expeditious launch of criminal prosecution against not just A Raja and some of the bureaucrats who worked under him but also his cronies in corporate entities who received undue favours. Some of them have been categorically named in the Comptroller and Auditor General’s report on the scam that was presented in Parliament on 16 November.

The government should have the gumption to take action against these corporate bigwigs. The companies that obtained licences in an illegal manner should have their licences cancelled. These licences should then be auctioned to partly compensate the government for the huge notional losses that it incurred in January 2008. But the nexus between business and politics is not snapped that easily.

There were three clear dimensions to the scam. Some companies (in the Unitech and Swan groups) gained because of undervaluation of spectrum. Others (in the Reliance and Tata groups) benefited from the Department of Telecommunication’s (DoT) decision to have a “technology neutral” licensing regime — wherein operators using either the Global System of Mobile (GSM) communications or the competing Code Division Multiple Access (CDMA) could use both technologies to provide telecom services.

The third category of beneficiaries included existing operators (such as Bharti, Vodafone and Idea) — the so-called “cartel” that Raja claims he tried to break — who received excess spectrum. By adding up losses under these three heads, the CAG arrived at the stupendous figure of Rs. 1.76 lakh crore.

IT IS important that the government acts fast for it has dragged its feet too long. For three long years, journalists have been writing about different aspects of the scam. It has been more than a year since the Central Bureau of Investigation lodged a first information report against “unknown persons” in the DoT. The Supreme Court seems to be in a belligerent mood and its pressure on the government may expedite action on the part of not just the CBI but also the Enforcement Directorate, the Central Vigilance Commission (headed by the controversial former Telecom Secretary PJ Thomas) and the Income Tax Department — if only these agencies are allowed to act in an independent manner. (This correspondent is one of the petitioners in the public interest litigation in the Supreme Court.)

There is so much information that is already in the public domain to nail the accused that only the absence of political determination will enable the culprits to get away. What indeed were the so-called compulsions of coalition politics that apparently ensured that the prime minister’s hands were tied behind his back until recently? Sure, the Congress-led UPA coalition needs the 18 MPs belonging to the DMK to remain in power. But, M Karunanidhi’s party needs the 34 Congress MLAs more to continue to run the Tamil Nadu government.

The prime minister used to often say that there is no difference between good politics and good economics. Using his own yardsticks then, by allowing law-enforcing agencies to lift the corporate veil without fear, by allowing auditors to independently sniff the money trail to establish the flow of kickbacks and slush funds and, above all, by ditching the DMK a few months before the Assembly elections (scheduled for April), Manmohan Singh could show the Congress high command how to simultaneously practice good politics and good economics.

Yet this could merely end up as wishful thinking, an all-too-optimistic expectation that circumstances could cut through some of the venality that has come to characterise public life in India.

Featured Book: As Author
Sue the Messenger
How legal harassment by corporates is shackling reportage and undermining democracy in India
Featured Book: As Publisher
India: The Wasted Years