Cong allegation: Modi govt has swept Rs 45,000 cr telecom scam under carpet

QUICK PILL

The allegations

• Congress accused PM Modi and his govt of sweeping a Rs 45,000 crore telecom scam under the carpet
• It says the govt did this to help \'friendly crony capitalists\'

The status

• The matter is sub-judice in various courts
• The previous telecom minister, RS Prasad, had announced a special audit of the telecom firms\' books
• However, the Congress has called this a case of delaying tactics

More in the story

• What did the CAG\'s audit of these firms\' books reveal?
• Why is the Congress taking the high road?
• Will it succeed in deriving mileage out of this?

Continuing its attack on Prime Minister Narendra Modi, the Congress on Friday accused his government of sweeping a Rs 45,000 crore telecom scam under the carpet, with the sole aim of helping "friendly crony capitalists".

It claimed that the loss to the public exchequer has been verified by the Comptroller & Auditor General (CAG), and that the Modi government is surreptitiously protecting the interests of six leading telecom companies by helping them avoid the payment of charges rightfully owed to the government.

Party spokesperson Randeep Singh Surjewala claimed that a CAG probe had been initiated an audit on the instructions of the UPA government, to look into the under-reporting of income and non-uniform method of accounting adopted by various telecom companies, and the consequent lack of obligation to pay outstanding licence fees and Spectrum Usage Charges (SUC).

Also read- Congress alleges Rs 45,000 crore telecom scam under Modi's watch

What is the alleged scam?

In March this year, a CAG audit of the books of India's top six mobile operators for the period 2006-07 to 2009-10 had pointed out that the government suffered a loss of Rs 12,488.93 crore, due to under-invoicing of gross revenue by these companies.

The companies, including Reliance Communications, Vodafone, Bharti Airtel, Tata telecom, Idea and Aircel, allegedly under-reported their adjusted gross revenue by Rs 46,045.75 crore, leading to a loss of Rs 12,488.93 crore to the exchequer between 2006 and 2010.

The CAG audit was delayed because of confusion surrounding the jurisdiction of the CAG to audit accounts of private telecom companies. The Supreme Court rejected the claims of telecom companies, vide a judgment dated 17.04.2014, permitting the CAG to audit the accounts.

In separate findings, CAG had said that the adjustment of a one-time entry fee paid by the telecom companies, whose licences were quashed by the Supreme Court, against the spectrum price they paid in 2012-13, deprived the national exchequer of Rs 5,476.3 crore.

"Under the Telecom Licencing Policy implemented in 1999, the BJP government gave a bailout package to help telecom companies. The licence fee was to be decided on the basis of gross adjusted revenue. Cellular service providers had to pay the SUC, in addition to the licence fee. This amount was linked to the income of cellular companies," said Surjewala.

Considered to be a part of the 'Consolidated Fund of India', Surjewala said it was obligatory for the CAG to satisfy itself that the government had received its complete and correct share of revenue.

Why is Cong taking the high road?

It is well known that the Congress-led UPA lost the 2014 general elections due to a slew of alleged scams that were said to have benefitted members of the ruling alliance These include the 2G scam, which played a crucial role in tarnishing the UPA's image.

To redeem its image, the Congress is trying to emphasise that it was the UPA government that ordered a CAG audit on the financial reporting by the telecom companies. Finally, the CAG had indicted these companies, and yet, the incumbent BJP government didn't take any action.

But, the question is, could the current government have taken any action immediately?

During his stint as the telecom minister, BJP leader Ravi Shankar Prasad had said that a special audit of the operators' books would be ordered for three years - 2009-10 to 2010-11 - to find if there were any outstanding dues. This was done because the calculation of licence fees is sub-judice, and stuck in various courts, including the TDSAT, high courts and the Supreme Court.

Can Cong derive mileage out of this?

It is unlikely. First, if the Congress had any issues with Prasad not ordering a probe, it should have questioned the government on the day he announced a special audit of the companies facing charges.

Also, even if the internal audit report indicts the telecom companies, it would be difficult for the government to implicate any company unless the different courts give their decisions on the definition of adjusted gross revenue.

However, Surjewala claimed that instead of immediately acting on these "shocking and startling revelations", the Modi government had opted for an alternative re-evaluation of these figures by the telecom ministry through chartered accountants who are empanelled with them.

"First, this is a clear methodology of Modi government - to inordinately delay the process of recovery for years together, if not write it off entirely. Second, it reflects the apparent mal-intent of the government to dilute or diminish the figures put forth by CAG," he said.

The Congress has asked if the government plans to recover actual losses, or whether it is a new way of minimising fiscal deficit.

"Is this the new 'governance model'? Why is the Modi government maintaining a conspicuous silence in the matter, becoming virtually comatose, despite the mammoth size of financial sums involved?" Surjewala asked.

Edited by Shreyas Sharma

More in Catch

Judge orders legal action against CBI. Says 2G chargesheet fabricated

Ex-telecom minister Pramod Mahajan is not a conspirator in 2G telecom scam: special court

2G scam: SC dismisses Kanimozhi's plea