Sibal says $40 bn spectrum loss estimate ‘utterly erroneous’ (Roundup)

Friday, January 7, 2011

NEW DELHI - Communications Minister Kapil Sibal Friday said the methodology adopted by the official auditor was “utterly erroneous” while arriving at the estimate of Rs.1.76 lakh crore ($40 billion) as the loss in awarding telecom airwaves in 2008.

Sibal also slammed the opposition for disrupting the entire winter session of parliament and spreading what he termed as “utter falsehood” in the country, having themselves framed the policy for award of airwaves or spectrum during their tenure.

Accordingly, he defended Prime Minister Manmohan Singh, saying he acted on the advice given to him by two senior cabinet colleagues based on the same set of arguments that were considered by the previous National Democratic Alliance (NDA) government.

“Though we respect the exercise of that constitutional authority’s power, we do believe the exercise was flawed with serious errors, which has allowed the opposition to spread utter falsehood to the people,” he told a press conference here.

His reference was to the report of the Comptroller and Auditor General of India which said the government’s policy on spectrum allocation for second generation (2G) telecom services caused a loss of between $12.8 billion and $40 billion to the exchequer.

“The figure of Rs.1.76 lakh crore is so utterly erroneous that I would have thought that a complicated and complex issue like this should not have led to the conclusion of this magnitude, which has embarrassed the government and the nation,” he said.

The minister said it was because of the policy in existence since 1999 that the average telecom tariff in India had came down from almost Rs.17 per minute (45 cents) to about Rs.3 (6 cents) per minute in 2004 and 30 paise (less than a cent) per minute now.

“This is the direct and tangible benefit. The benefit of this reduction in tariffs is estimated at over Rs.150,000 crore ($33 billion) per annum to the consumers,” he said. “The loss is Zero, nil,” he said, refuting the audit estimate point-by-point.

“The Comptroller and Auditor General has done injustice to itself, and the opposition is doing injustice to the aam aadmi,” he said. “We believe that the exercise was fraught with errors. We object to that.”

“If there is proof of any wrongdoing or criminal offence, the law will take its course,” said the minister, a lawyer by profession. “We are not here to protect or defend anyone.”

Sibal’s predecessor A. Raja was forced to resign in November after the official auditor indicted him in the spectrum allocation saga. The saga also blocked legislative business with the opposition unrelenting in its demand for a parliamentary probe.

Sibal said as per the 10th Five Year Plan document, drafted during the NDA regime (1998-2004), the growth of telecom sector was more important than revenues from the award of spectrum.

“Today they say revenue is important,” he said, adding the United Progressive Alliance (UPA) government under Manmohan Singh, since it took power in May 2004, had only followed a policy set by the NDA.

The minister said the whole basis of pegging the presumptive loss to the money raised by way of auctioning airwaves for third generation (3G) telecom services to companies was also not a proper way of looking at matters.

It may be thought the decision to auction 3G spectrum makes out an automatic case that 2G spectrum should also have been auctioned. This is not a valid conclusion,” he said.

“The government charges toll for the use of highways, but the use of rural road is never tolled,” he added, drawing an analogy between the common user’s 2G telecom services and those for companies and individuals for faster 3G services.

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