Par panel for raids, audits on telcos understating revenue

A key Parliamentary panel, examining a CAG report on under-reporting of revenue by six telecom firms some years ago, has suggested that measures including carrying out raids on such companies should be considered and their accounts be checked periodically.
The suggestions came in a meeting of Public Accounts Committee (PAC), chaired by K V Thomas, which met this week to examine the audit report showing Rs 12,488 crore loss to the exchequer between 2006-07 and 2009-10 due to under-reporting of revenue by six firms, including Airtel, Vodafone and Reliance Communications Ltd.
Members in the panel suggested that besides rectifying defects in policies, if any, emphasis should be on engaging the best of the lawyers by the government to ensure that the companies do not have an upper hand in litigations.

"There was also a suggestion that there raids should be conducted by telecom and revenue department officials on private telecom companies to check violations. Their accounts should be examined and raids be carried out," members said in the PAC meeting on June 13, which was attended by top officials of Telecom and Revenue Ministries besides Telecom Regulatory Authority of India (TRAI).
The PAC is likely to submit a report on this issue next month after another meeting.
Officials from the government side, who appeared before the panel, are learnt to have argued that Indian telecom sector has taken a new shape in the last 15 years and certain policy deficiencies may need to be addressed.

"We said that defects in policy, if any, need to be rectified and the system should be strengthened," said a source.

The panel in an earlier meeting on June 6 had slammed telecom and finance ministries for "inefficient functioning" of some of their units.
It had said the lack of proper supervision of Controllers of Communications Accounts (CCAs) in Department of Telecom (DoT) and the Financial Wing in the Finance Ministry has "contributed to significant financial loss to the exchequer".
Examining the CAG report tabled in Parliament on March 11 on revenue sharing by private telecom operators between 2006-07 and 2009-10, the PAC also asked the telecom ministry representatives about a large number of litigations as it examined various angles of the sharing formula.

In its report, the Comptroller and Auditor General of India (CAG) had said that Reliance Communications, Tata Tele, Vodafone, Airtel, Idea and Aircel 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 from 2006 to 2010.
The CAG had said adjustment of one-time entry fee paid by telecom firms, whose licences were quashed by the Supreme Court, deprived exchequer of Rs 5,476.3 crore.