Telecom Raja

Minister Communications and Information Technology

The Rs 60,000 crore-scam began when the government allocated scarce 2G spectrum at throwaway prices that too to a string of companies without any experience in the telecom sector. The allegation is that the government gave away scarce spectrum to nine companies, clubbed with licences, on a first-come-first-serve basis, rather than through an auction process. That is, an operator got start-up spectrum by paying pan-India licence fee of Rs 1,650 crore. This price was not taken on the basis of the 2007 market value but on the basis of an auction held in 2001.

Also, many new players roped in foreign investors soon after acquiring the licences, thereby making a neat sum. The value of the licence and spectrum in 2007 could not be the same as in 2001 as the telecom market has grown phenomenally during this period. Prime Minister Manmohan Singh refused to accept the allegations surrounding Spectrum Raja.

Raja has continually maintained that the government has simply following its earlier practice of allotting 2G start-up spectrum along with licences on a first-come-first-serve basis. The 2G spectrum allocation issue came under the scrutiny of various bodies, including the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI). Despite these investigations during the UPA-1 regime, Raja returned as the IT and communications minister in UPA-2. Raja is an MP of UPA ally DMK.

The government policy of 2G spectrum is facing fire as the ongoing auction of 3G (third generation) spectrum has resulted in exceedingly high bids. Against the pan-India reserve price of Rs 3,500 crore, the 3G auction has yielded close to Rs9,000 crore in 16 days of bidding. The 3G bidding is nowhere near the closing line yet.

Source - India Spectrum (MSN.IN)