The flesh was weak

Andimuthu Raja, former telecom minister, has sent a statement to the Joint Parliamentary Committee set up to probe the allocation and pricing of telecom spectrum from 1998 to 2009 that he did not mislead Prime Minister Manmohan Singh on the issue. Had he done so, Dr Singh wouldn't have reappointed him as telecom minister in 2009, Mr Raja has added. Mr Raja's missive has become a political hot potato. Dr Singh is under the scanner for turning a blind eye to what was happening in the telecom ministry - had he reined in Mr Raja right at the beginning, the so-called 2G scam wouldn't have happened. The fact is that spectrum pricing was an issue Dr Singh was worried about even before Mr Raja became telecom minister in May 2007.

On February 15, 2005, the Prime Minister's Office communicated to the Cabinet Secretariat that a group of ministers on telecom should be set up. The terms of reference of the group, as approved by Dr Singh, were: identify spectrum for big users such as mobile service operators and defence forces; find out how the defence forces could vacate their current spectrum and move on to another band; and suggest a spectrum pricing policy. The Cabinet Secretariat issued the notification on February 23, 2005. Five days later, on February 28, 2005, Dayanidhi Maran, the then telecom minister and Mr Raja's predecessor, wrote to Dr Singh that some of the terms of reference impinged upon the normal work of his ministry. He followed it up with another letter, with similar content, on November 16, 2005. On November 27, 2005, the Prime Minister's Office sent a fresh note on the subject to the Cabinet Secretariat. Conspicuously missing was the spectrum pricing policy. On December 7, 2005, the Cabinet Secretariat made the necessary modifications in the group's terms of reference.

But that wasn't the end of the matter. On March 28, 2007, Ashok Jha, then finance secretary, wrote to D S Mathur, then telecom secretary, that it was important to bring spectrum pricing back into the group's terms of reference. Mr Mathur wrote back on April 2, 2007, that "spectrum pricing is ... within the normal work carried out by this [telecom] ministry". Mr Jha then wrote to B K Chaturvedi, then Cabinet secretary, on April 19, 2007, to include spectrum pricing in the terms of reference. Mr Chaturvedi, on May 17, 2007, advised Messrs Jha and Mathur that they should discuss the issue and communicate the decision to him. But nothing seems to have come out of it.

The ministry of law and justice, too, had favoured referring the matter to a group of ministers. But Mr Raja would have none of it. On November 2, 2007, he wrote a letter to the prime minister in which he said he had wanted the ministry of law and justice to look at various options to process applications for telecom licences. Instead, Mr Raja wrote, "The ministry of law and justice suggested referring the matter to [an] empowered group of ministers. Since new major policy decisions [alone] are referred to a group of ministers, needless to say that the present issue relates to procedures and [therefore the] suggestion is totally out of context."

While Mr Raja's letter was in transit, Dr Singh wrote (also on November 2, 2007) to Mr Raja that, given the scarcity of spectrum and the large number of applications received, the department of telecommunications should consider (a) introduction of a transparent methodology of auction wherever legally and technically feasible, and (b) revision of entry fee, which is currently benchmarked to an old figure. (Indeed, the price of Rs 1,651 crore for a pan-India licence was fixed in 2001 when there were only a few million subscribers - the number had grown manifold by 2007.) "I would request you to give urgent consideration to the issues being raised with a view to ensuring fairness and transparency, and let me know of the position before you take any action in this regard," Dr Singh concluded his letter.

Later in the day, Mr Raja dispatched another, and lengthier, letter to Dr Singh. It was written at the camp office at his home. "Vanakkam," he began his letter, "I would like to inform you there was, and is, no single deviation or departure in the rules and procedures contemplated in all the decisions taken by my ministry, and as such full transparency is being maintained by my ministry, and I further assure you the same in [the] future also." To auction 2G spectrum would be unfair to the new players when incumbents had got up to 10 megahertz free, he said, and the issue of spectrum auction had been discussed with the Telecom Regulatory Authority of India and Telecom Commission "and was not recommended". Somehow, it seems, Dr Singh wasn't convinced that the first-come, first-served policy of handing out spectrum at historical prices was the right thing to do. On December 12, 2007, he indicated once again the approach he favoured. "The revenue potential to the government must not be lost sight of. After all, governments across the globe have harnessed substantial revenue while allocating spectrum," he said while inaugurating India Telecom 2007.

The demand for a group of ministers on the issue of spectrum pricing was also raised by then Commerce and Industry Minister Kamal Nath. He wrote a letter to the prime minister on November 3, 2007, in which he expressed "concern on the sudden and alarming developments in the telecom sector". He added that a comprehensive look into the various issues facing the sector was required, and the right way to do that would be to set up a group of ministers. It seems that Dr Singh discussed the matter with Mr Raja on November 14, 2007. The next day, November 15, 2007, Mr Raja wrote to Dr Singh that any reference of the matter to a group of ministers was "out of context". He concluded by saying that he was no less concerned about India's image (than Mr Nath) and all his decisions would be guided by the larger interest of the public, competition and growth of the telecom sector.