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The Comptroller and Auditor General of India (CAG) has said that the Department of Telecommunications (DoT) was responsible for multiple violations of policy in handing out second generation (2G) mobile phone licences in January 2008.
The indictments are contained in two reports prepared for the Central Bureau of Investigation (CBI), according to news reports. One report documents all the violations by DoT during April 2007 to March 2008, and another relates only to the allocation of 2G spectrum. The two reports are to be tabled in the winter session of Parliament, due to begin in the first week of November.
CAG has objected to the first-come-first-served policy adopted by DoT for handing 2G licences to five firms, Unitech Wireless, Loop Telecom, S Tel, Videocon Mobile and Etisalat DB (then Swan Telecom) in January 2008. It further added that the policy was not transparent and that DoT had tipped off the firms in advance, as a result of which they had been able to arrange demand drafts worth Rs 16.5 billion in 45 minutes to obtain pan-India licences.
Further, CAG said the licences were allotted in January 2008 at 2001 prices, which was unjustified, given that there were only four million mobile phone subscribers in 2001.
CAG has also taken objection to DoT?s decision to first ?arbitrarily? advance the cut-off date for applications by a week from 1 October 2007 to 25 September 2007 and then to make it public only on the last date of issuing of letters of intent, 10 January 2008. By doing so, DoT restricted the number of applicants to 122. Going by the earlier deadline, the number would have been 465.
In a further indictment, CAG has questioned the propriety of the manner and sequencing in which DoT issued public information relating to the sale of 2G licences. While normally this information is routed through the Press Information Bureau, the official publicity arm of the government, in this instance DoT decided to put out the information on its website instead.
The public audit body has also flagged the fact that these decisions had not been vetted or approved either by the Telecom Commission or the Cabinet Committee on Economic Affairs (CCEA), which normally oversees any major policy change. .
In another indictment, CAG has observed that the first five companies that submitted the demand drafts and were eventually selected did not meet the eligibility criteria. It has sought DoT?s response as to why these licences should not be revoked.
