P Chidambaram on 2G Scanner?

CNN-IBN

New Delhi, 22 September 2011: Home Minister P Chidambaram has been brought under the 2G scanner by his own government - Pranab Mukherjee had sent a note to Prime Minister Manmohan Singh in March 2011 saying Chidambaram as then Finance Minister could have prevented the scam.

 

An official Finance Ministry document has cast doubts over the role of Home Minister P Chidambaram, who was then finance minister, in the January 2008 decision of former telecom minister A Raja to issue 2G spectrum licences.

 

On March 25, 2011, Dr PGS Rao, Deputy Director in the Finance Ministry, sent an office memorandum to Vini Mahajan, Joint Secretary in the Prime Minister’s Office, regarding allocation and pricing of 2G spectrum. Finance Minister Pranab Mukherjee approved the note after personally inspecting the 11-page document.

 

The Finance Ministry note sent many months after the 2G controversy broke and just a month after Raja was jailed in February, has been accessed by RTI activist Vivek Garg.

 

The note indicates involvement of Home Minister P Chidambaram, who was then finance minister, in the 2G spectrum allocation. The note contains details of the role of Chidambaram and the Finance Ministry in the controversial allocation of 2G spectrum.

A Raja, DMK MP Kanimozhi, former telecom secretary Sidharth A Behura and several corporate leaders are already in jail for their alleged involvement in the 2G spectrum scam.

 

The note categorically stated that the Department of Telecom (DoT) would have been forced to cancel the 2G licences doled out by Raja, had the Ministry of Finance under Chidambaram, stuck to its original demand for auctioning the initial ’start-up spectrum’ of 4.4 megahertz each allotted to the 2008 licensees.

 

Various official estimates have put the loss to the exchequer due to the 2G allocation on January 10, 2010 somewhere between Rs 50,000 crore to Rs 1,76, 000 crore. However, present Telecom Minister Kapil Sibal has gone on record to claim the exchequer suffered no loss on this account.

 

The note from the Finance Ministry, now headed by the UPA Government’s all-season trouble-shooter Pranab Mukherjee, makes several telling observations.

 

It says that the Finance Ministry under Chidambaram "implicitly agreed to imposition of same entry fee as that prevailing in 2001 for licences allotted upto December 31, 2008."

 

This despite a November 22, 2007 note by then finance secretary and present RBI Governor D Subbarao, that the 2001 mobile licence entry fee of Rs 1600 crore had been applied and not the market price at that time.

 

The note goes on to say how there was consensus between Raja and Chidambaram not to charge more for spectrum up to 4.4 megahertz. The note said, "However, these were not charged (beyond the normal spectrum usage charges) since there was consensus, at the levels of the ministers concerned, that spectrum beyond the ’start-up’ levels (beyond 4.4 megahertz) only should be charged."

 

"DoT could have invoked this clause (5.1 of the UAS licence) for canceling licence if the Ministry of Finance had stuck to the stand of auctioning the 4.4 megahertz spectrum," the note sent to the PMO said.

 

Vivek Garg with his barrage of RTI applications has been trying to get the detail on the 2G spectrum scam. He said this note will be a game changer.

 

"It was not possible to do such a big scam without the involvement of Ministry of Finance or other ministries. The document I have got from the PMO through RTI is an eye opener. It prima facie exposed very clearly that Mr Chidambaram and other people are involved in this scam," said Garg.

 

Moreover, according to the Finance Ministry note, on January 15, 2008, five days after Raja’s ministry doled out 121 letters of intent (LOI) to companies, Chidambaram’s secret note informed Prime Minister Manmohan Singh that the spectrum allocation - made in the past - should be treated as a "closed chapter".

 

Fifteen days later on January 30, 2008, Chidamabaram and Raja met and "it was noted by then finance minister that he was for now not seeking to revisit the current regimes for entry fee or revenue share."

 

The decision was taken despite Chidambaram’s own ministry objecting to Raja’s decision even a month after the LOI’S were issued by Telecom Ministry.

 

On February 11, 2008, an internal note was prepared by the Department of Economic Affairs, wherein the entire range of spectrum was proposed to be charged for both new and old operators.

 

The note to the PMO said that the Department of Economic Affairs was legally within its rights to revise the spectrum pricing, even though the letter of intents were already granted even though there was an anticipation of litigation from the companies who were already allocated 2G spectrums.

 

However, two months later, on April 21, 2008, Chidambaram sent a ’non-paper’ to Raja where he conveyed that ’in-principle’ decision may be taken to price the spectrum beyond 4.4 megahertz. This was precisely what Raja’s ministry was suggesting all along.

 

The Finance Ministry will have to explain why it took a U-turn after giving a clean chit to Chidambaram to the Comptroller and Auditor General. One thing though, this notes establishes is that there was consensus between Raja and Chidambaram on not charging for spectrum upto 4.4 megahertz. Also there was a common desire not to revisit the issue of entry fee or user charges. And so it adds a new dimension to one of the biggest scams in the country.

 

When CNN-IBN asked Pranab Mukherjee about the note, he refused to comment. He said the 2G matter is sub judice. But the Congress is sticking by Chidambaram, it says there’s no truth in all the allegations.

 

"We do not, in any manner, accept the allegation made by Dr Subramaniam Swamy against Mr Chidambaram. The party does not doubt his integrity. This precise issue has been raised by Dr Swamy in the apex court and is sub judice. Without waiting for the proceedings to be completed, it is highly objectionable and inappropriate for Dr Swamy or anyone else to pass premature judgement on the very same issue on which he is seeking relief. We may also add that the mischievous attempt to create a rift between different constitutional functionaries is highly regrettable and ought not to be repeated," said Abhishek Singhvi.

 

Janata Party leader Subramanian Swamy who is the petitioner in the 2G case and the Opposition are both gunning for Chidambaram insisting on a CBI probe against him.

 

"It in fact bolsters what the CAG report had said on pages 26 and 27 that Chidambaram if he didn’t want to agree with the price he could have used transaction or business rules for the Cabinet and got it down, so I think frankly speaking, the CBI inquiry has become necessary and my trial court petition asking that he be made a co-accused also strengthens," said Swamy.

 

"The corruption in the allocation of the spectrum could have been avoided. Today the truth has come out. The PM should order an investigation into the role of P Chidambaram in the 2G scam," said BJP leader Ravi Shankar Prasad.