CAG submits report on 2G spectrum to govt: Vinod Rai

Loss to exchequer estimated at Rs 1.76 lakh crore

PTI | November 10, 2010



The Comptroller and Auditor General of India today said it has submitted to the government the report on the 2G spectrum allotment that may have caused a loss of over Rs 1.76 lakh crore to the exchequer.

"Yes, we have submitted the final report to the government. I cannot disclose the findings of the report. It is up to the government when it will be tabled in the Parliament... may be within a fortnight or it may take long," Vinod Rai told reporters here.

Sources in the know say that the CAG has accused the Telecom Ministry for undervaluing 2G spectrum, sold to new players in 2008, and held that the allotment price was not realistic, which has caused a revenue loss of Rs 1,76,700 crore to the government.

The report is understood to have named Telecom Minister A Raja for taking arbitrary decision while allotting 2G spectrum, bundled with licences in January 2008.

They said a copy of the report has been sent to the finance ministry and to the President. The process usually takes 10-15 days to finalise and then it would be tabled in the Parliament. The month long winter session of the Parliament began on November 9.

Nine firms were issued licences, bundled with start up of 2G spectrum, in January 2008 at Rs 1,658 crore for pan-India operations.

The CAG report said the price at which the spectrum was alloted in 2008 was based on 2001 prices, which was quite low and has resulted in a loss to the government exchequer.

The report also said that Raja ignored the advice of the law ministry and Prime Minister and advanced the cut off date for giving the Letter of Intent (LoI).

The telecom ministry had, however, hit at the CAG saying the policy decisions cannot be "assailed" as arbitrary and debunked CAG's assertion that 2G spectrum was allocated in an arbitrary manner.

"Decisions (on spectrum) taken on the basis of New Telecom Policy of 1999 and the Cabinet decision of 2003, coupled with periodic and respective TRAI's recommendations.

"(This) cannot be assailed by the audit as arbitrary or cause of exchequer loss until and unless the entire policy devised with legislative backing is changed or modified by the same authorities concerned," DoT had said in its reply to the Comptroller and Auditor General.

CAG has reportedly put the revenue loss to exchequer at up to Rs 1.40 lakh crore, in addition to another Rs 36,700 crore on allocation of spectrum beyond contractual limit to existing nine operators.

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