Sibal's escapology

When it comes to wriggling out of trouble, the Minister for Communications, Mr Kapil Sibal, could have taught Harry Houdini a thing or two. His claim that there was no financial loss to the country as a result of the 2G spectrum allocation policy followed in 2008 is breathtaking, if only for its sheer nerve. That not even Congressmen believe it is another matter altogether. Whatever calculations Mr Sibal might deploy to prove his theory, the central question remains: why was a scarce national resource priced in 2008 at 2001 prices and then allotted to a few select companies? Mr Sibal has not answered this. Instead, his contention that start-up spectrum is anyway free because it is given to operators bundled with the licence, is misleading. It may have been needed in 2001, when the industry was stalling, but its value in 2009 becomes evident from the subsequent deals struck by some of the companies who sold equity stake to foreign players at multiples of the entry price they paid the Government without even putting up a single tower or owning a subscriber. Surely, the foreign players did not pay millions of dollars just to get hold of 2G licences, which are but pieces of paper, without spectrum.

Instead of dismissing the price-related observations of the Comptroller and Auditor General, Mr Sibal would have done well to have focused on the more serious allegations — namely, how laid-out procedures were subverted in awarding licences to a select few. The Government has to answer why it decided to hand out licences to the likes of Swan, Datacom and Unitech, when as many as 46 companies had put in their applications. It also needs to explain why the Department of Telecom shifted the deadline for receiving applications from October 1, 2007 to September 25. As a result of this, 408 applications, from the likes of AT&T, Hindujas, Sterlite and Moser Baer, got automatically disqualified. Also, on January 10, 2008 DoT changed the first-come-first-served criteria by giving priority to those who paid the entry fee first instead of those who had applied first. Only two hours' notice was given to the applicant companies and yet how did a few of them get bank drafts worth thousands of crores of rupees, dated a day ahead, as if they had got advance information about the impending notice? Until these questions are answered, Mr Sibal will continue to edge the Raja ball rather than, as he hopes, drive it cleanly. That said, he is probably right in criticising the notion of imputed losses. They tend to distort the picture and allow the wrong-doers a chance to wriggle out of trouble.

Finally, by taking on the CAG in the manner he has done, Mr Sibal has started a bad precedent by undermining its already diminished authority. In that sense, he has not acted very responsibly and the Prime Minister, if he was ignorant about what Mr Sibal was proposing to do, should speak sternly to him.