The 2g Scam: an Example of Corruption at the Highest Levels

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  • Topic: License, Lakh, Comptroller and Auditor General
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  • Published : January 19, 2011
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The 2G scam: An example of corruption at the highest levels 

India, the next big thing in world economy today has proved itself as the world’s largest democracy, but not without some discomforting byproducts. The most destructive of them is “Corruption”. The latest example to bring shame to the country is the 2G scam.

What is the 2G Scam?
Although the current telecom minister, Kapil Sibal has been disagreeing to the scam, it is alleged that 2G licenses were issued by the former telecom minister, A. Raja to private telecom players at throw-away prices in 2008.

According to the Comptroller and Auditor General (CAG) report, the presumptive loss to the government on account of the illegal spectrum allocation has been projected at Rs. 1.76 lakh crore.

It is also alleged that the rules and procedures were flouted while issuing the 2G licenses.

What are the charges on former telecom minister A. Raja?

❖ Cheap Telecom Licences
• Entry fee for spectrum licenses in 2008 was pegged at 2001 prices • Mobile subscriber base had shot up to 350 mn in 2008 from 4 mn in 2001

❖ No Procedures followed

• Rules changed after the game had begun
• Cut-off date for applications advanced by a week
• Licenses issued on a first-come-first-served basis
• No proper auction process followed, no bids invited
• Raja ignored advice of TRAI, Law Ministry, Finance Ministry • TRAI had recommended auctioning of spectrum at market rates

❖ Favouritism, Corporate encash premium and government left in loss

• Unitech, Swan Telecom got licenses without any prior telecom experience • Swan Telecom given license even though it did not meet eligibility criteria • Swan got license for Rs. 1537 crore, then sold 45% stake to Etisalat for Rs. 4200 crore • Unitech Wireless got license for Rs. 1661 crore, then sold 60% stake for Rs. 6200 crore • All nine companies paid DoT only Rs. 10,772...
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