Sunday, April 13, 2014

Was the 2G scam a scam at all?

One reason for the UPA's declining fortunes is the preponderance of 'scams' under UPA-II. One big 'scam' that has proved its undoing is the 2G 'scam'. Right from the time, the CAG report came out, I had argued that not opting for the auction route for spectrum rights and adopting a first-come-first-served policy, based on a low price, did not constitute a scam.

First, the policy had been practised by the NDA as well. Secondly, the low price ushered in competition and helped boost telecom density to great heights. So the policy itself was a success. Where things may have gone wrong- and this has to be established in a court of law- was in the manner in which first-come-first-served was implemented under the then minister, A Raja. PC Chacko, who headed the JPC enquiry into the subject, mounts a vigorous defence of the 2G policy in a recent interview:

The 2G scam is no scam. The media must have celebrated the 2G scam, but it is no scam.
There was some impropriety in giving licenses irrespective of the priority of the application and that mistake was done by (former telecom minister) A Raja. He was in jail for that failure, but the government did not defend him. He is still undergoing trial.
According to the CAG (Comptroller and Auditor General), the government's mistake was selling spectrum at a lower price and not by auction. This is totally unfounded. That is the basis of the allegation.So, I can repeatedly say that 2G is no scam at all.

Unfortunately, this defence and others put up by the UPA is likely to drowned in the general election din. Public perceptions are shaped by the media and the media loves a corruption scandal as much as the general public. Once the damage is done, it is hard to salvage a reputation. 


Praveen Goswami said...

This is something which I was keep telling my friends that don't treat 2G as scam. It's a six in no ball.

I would say there is more required like this in manufacturing and infrastructure sector.

Pre-corruption( Wheat) is more harmful than post-corruption( Bread)
At-least you have added value in complete cycle.

It's critical for all of us to know the actual usage of your resources. If you use nut(iron nut) in Bicycle it will cost 2 Rs. but if you use in Rocket it will cost 2 Lakhs.

Anonymous said...

Why the hell then we have a "tendering" process in all the Central & State PSUs. Let's go by first-cum-first serve basis.

Whether you call it corruption or impropriety or error or mis-judgment or whatever, I think following were the pitfalls:

1. First, there was no policy whether auction is mandatory or not and even whether First-cum-first serve is an option or not

2. The question still remains unanswered - Why no auction? Did UPA thought of it and then declined? Or they never thought of it and went straight for first-cum-first serve.

3. Even after adopting FTFS, one goes for giving license as per individual prerogative.

I don't know what you call above. Aren't impropriety and corruption synonymous, at least for a layman? And other point that Raja did or PMO did or XYZ did it - the fact remains that it happened under UPA II government.

I would say it is still a very much a corruption.

Yes, we may argue and perhaps rightly so, that value involve was only peanuts and not Rs 1.76 lac, as extrapolated by CAG. Had we gone was auction, 2G would have cost Rs X, which today is Rs X+ something. In fact, let me go further and make a conjecture that auction would have cost more than First-cum-first serve process.

For me the moot point is not what was the economic loss - the question is on "Transparency & Accountability" - in one word "Governance". What was supposed to be 'rightfully' done and what was 'actually' done - and who take 'accountability' for whatever was done.

To conclude - for me it still remains a corruption, irrespective of media hype and irrespective of elections going in back ground. A graft is a graft, connivance is connivance, corruption is corruption - it is unethical - now be it Rs 1.76 lac or mere Rs 17600. That does not matter.

Anonymous said...


Surprised and Disappointed by your comments. I am not attempting to argue with you, but there are some points to be considered:

1) First Come First basis was derived when the auction had not mcuh taker. The reserve price was derived from the auction itself.
It has to be accepted that there was a sea change in telecom during NDA and UPA year. The technology was costlier, market had to be created etc. and when the second round of First come first actually started the telecom penetration had already gained momentum.

2) Arun Shourie (of which you are no fan of .. :-) ) has argued that even with this policy Raja and others had shown enough actions to constitute as scam eg. change/sudden announcement of application dates which also led to resignation of disgust of some senior beaurocrats.

I think Supreme Court would have taken all this into consideration when it has accepted to hear the case.

Of course, I have seen your blogs to bring balance in different viewpoints particularly regarding governance and politics which general public are dismissive off. But would not like you to turn into an apologist of malgovernance.