The Public Accounts Committee (PAC) has, in a draft report on 2G scam, strongly indicted former Telecom Minister A Raja and come down heavily on the PMO and the Cabinet Secretariat for not taking "corrective action" while not sparing even the Prime Minister for "some unfortunate omissions".
The report circulated by PAC Chairman Murli Manohar Joshi, which is most likely to be contested by members of the ruling UPA, is also understood to have attacked the then Finance Minister P Chidambaram for recommending the Prime Minister to "treat the matter as closed" instead of taking action against those responsible for losses to the exchequer.
The voluminous report has some unpleasant words for Prime Minister Manmohan Singh, who had kept his office at "arm's length" in the 2G spectrum issue which helped Raja "to execute his unfair, arbitrary and dubious designs".
The report says the Prime Minister on January 3, 2008, wanting to keep the PMO at "arm's length", seemed to have given an "indirect green signal" to Raja to go ahead and "execute his unfair, arbitrary and dubious designs".
The controversial distribution of licences and spectrum was taken by the DMK representative in the Cabinet on January 10, 2008, which the CAG had estimated a presumptive revenue loss of over Rs 1.76 lakh crore.
The report, which will come up for consideration at tomorrow's meeting, said the PMO certainly either failed to see the "forebodings or was rendered a mute spectator".
The committee said it was highly perturbed to note the considered and imperative advice given by the Prime Minister and genuine concerns expressed by him on the developments in the telecom sector in his November 2007 letter to Raja was "just disregarded" by him.
"The Prime Minister was in fact misled when he was informed by the minister (Raja) that the issue of auction of spectrum was considered but not recommended by the Telecom Commission and also not recommended by TRAI. The minister was saying a half truth, concealing the other half, concealing his ulterior design," the report said.
In its criticism of the PMO, the report said the PMO's reply that no suggestion of the Law Minister to set up an Empowered Group of Ministers was received by them does not convince the committee.
"...the PMO was very much aware of the Law Minister's suggestions but the counter view of the Communication Minister got overriding preference to the Law Minister's view for some unknown reasons and thus no effort was made by the PMO to initiate the process of constitution of the EGoM.
"The PMO certainly either failed to see the forebodings or was rendered a mute spectator," the report said.
However, the report had a word of praise for the then External Affairs Minister Pranab Mukherjee who had in a note to the Prime Minister revealed that he had underlined the responsibility of the government to frame, revise and change the policy in a transparent manner and then follow it in letter and spirit.
Mukherjee had also categorically remarked that while keeping on issuing new licences, the criteria for grant of the licences may be strengthened and put in public domain at the earliest.
Thus, it is evident that he did not give any wrong advice to Raja who in turn "distorted the facts while writing to the Prime Minister".
Not only that, Raja "arrogantly" termed the suggestions of the Law Minister to refer the spectrum related matter to EGoM as "out of context".
He audaciously informed the Prime Minister that the cut- off date has been fixed at 25th September, 2007 on the plea of shortage of spectrum whereas on another occasion he had said that there was enough scope for allotment of spectrum to few new operators.
"His (Raja) assurance to the Prime Minister that he was not deviating from the established and existing procedures was a blatant lie as he deformed and distorted the first-come, first-serve (FCFS) policy," the draft report said.
In its comments on Chidambaram, the report said "the committee are shocked and dismayed to note that the Finance Minister, in his note dated February 15, 2008, acknowledged that spectrum is a scarce resource and the price of spectrum should be based on its scarcity value and efficiency of usage but made unique and condescending suggestion that the matter be treated as closed.
"The committee believed that ends of accountability demand that any wrongful loss caused to the government is made good and the guilty brought to justice.
"The committee view it most unfortunate that since the Finance Minister, the guardian of the public exchequer and entrusted with the principle task of mobilisation of resources for public welfare, instead of initiating stringent and swift action against all those responsible for the whopping loss to the exchequer, pleaded with the Prime Minister to treat the matter as closed," it said.
The committee found the Secretary of Department of Economic Affairs deficient and wanting as he failed to bring the matter to the notice of Cabinet secretary or even in writing to the Finance Minister even after irregularities became public and there was public outcry for the huge loss to the public exchequer.
It sought explanation from the then Secretary, DEA and all those who chose to be silent bystander or rather indulgently condescending and pleaded for forgetting the loss and treating the chapter as closed.
The committee found that procedures followed by the DoT for issuance of 157 licences in 2007-08 smacked of serious irregularities leading to staggering losses to the exchequer.
Its examination has revealed gross violation of established norms, rules and procedures, dereliction of duty on the part of ministries and departments concerned, scant regard bordering on contempt for considered suggestions and opinions of the people and organisations that matter.
The scrutiny revealed the flip flop in implementation of the UASL regime which was approved by the Cabinet in 2003 based on the recommendations of the TRAI.
The committee found that in the process of issuing licences devising an efficient allocation formula for allocation of spectrum along with an appropriate price remained unachieved.
Delinking the price of spectrum from the issue of licences was given a go by disregarding the Cabinet decision.
The committee was deeply distressed that due to violation of the Cabinet's decision and as a consequence of such deliberate omission, the issue of UAS licence and allocation of spectrum in 2007-08 at the price discovered in 2001 caused a staggering but wholly avoidable revenue loss.
Considering what happened in the spectrum allocation under Raja, the report recommended a strong system of monitoring and compliance of Cabinet decisions and firmly putting in place by revisiting the transaction of business
rules in order to ensure that the Cabinet decisions are implemented in letter and spirit and no undue advantage be taken of the systemic loopholes by the "ravenous fly-by-night operators" created as front companies by unscrupulous elements.
On the telecom department overruling the views and concerns of the finance ministry, the committee said it was startled to observe the manner in which the then Telecom Minister Dayanidhi Maran succeeded in getting revised the terms of reference of the GoM issued by the Cabinet Secretariat under the PMO in November 2006 excluding the matter of spectrum pricing from the purview of finance ministry and leaving it solely to DoT to decide.
The committee was shocked that as required under transaction of business rules, modification in the Cabinet decisions of October 2003 was never brought before the Cabinet even for ex-post facto approval.
"The DoT owes explanation for such a gross dereliction of duty. The Cabinet Secretary and the PMO knew about these developments but did not take corrective action," it said.
The committee pointed out that the senior bureaucrats in the DoT were not allowed to discharge their duties properly and effectively as required for transparent governance.
"Obviously, the role of Cabinet Secretariat and the PMO remains far from edifying in that they too overlooked the need for compliance with the decision of the Cabinet," it said.
On the issue of work of GoM and its terms of reference, the committee found that the PMO threw the ball in the court of ministry and the Cabinet Secretariat washed off hands by stating that the responsibility of ensuring compliance with the directions of the Cabinet or its committees rests with the ministry.
"What further irks the committee is the reply of the PMO that there is no specific requirement for the PMO to enforce Cabinet decisions and nor is this the general practice.
"The committee wonder if it is not the duty of the PMO or the Cabinet Secretariat to enforce the Cabinet decisions in letter and spirit who else is entrusted with the responsibility," it said.
The committee said that it was of the firm opinion that if it was not a requirement earlier on the part of the Cabinet Secretariat and the PMO to ensure the enforcement of the Cabinet decision, the 2G scam should be an eye opener for them to at least now start the practice and vigorously monitor the effective compliance of every Cabinet decision.
On ignoring the advice of the Law Ministry by Raja, the report deplored the "intemperate and indecorous" manner in which the advice of the Law Ministry to refer to the EGoM such and important matter like following a fair and transparent procedure for handling the large number of applications for grant of UASL was termed as out of context by the Telecom Minister.
"The DoT could not furnish any cogent explanation for setting aside the advice of Law Minister nor could they furnish the file containing the said draft letter.
"It is really surprising and shocking that the legal opinion which was sought by the Department on its own volition was rejected by the minister. Needless to say, by doing so the benefits of discussion on important telecom matters in an inter-ministerial forum were deliberately stymied," it said.
The committee was also shocked to note that contrary to the advice of the Law Ministry, the Communication Ministry made a direct reference to Solicitor General on January 7, 2008, seeking his opinion on the press release. the SG had opined that the proposed course for issue of letter of intents was "fair and reasonable and make for transparency".
"What is intriguing is that the SG gave advice on a matter for which the Ministry of Law and Justice had advised for reference to EGoM.
"The Law Secretary while deposing before the committee has categorically stated that seeking direct opinion of SG bypassing the Ministry of Law and Justice is not in line with the rules and procedures prescribed in this regard," it said.
It noted that the Attorney General was of the opinion that the minister should not make references to any law officers directly.
"But it is quite intriguing that the Attorney General, when he was the Solicitor General, has had himself entertained a direct reference made by the Minister of Communication and IT," it said.
The committee, therefore, recommended that a serious view must be taken in the matter and said that the advice given by the Law Ministry particularly on important matters having wide ranging implications must be taken with the seriousness that it deserves.
Where rejected, reasons must be furnished to the Law Ministry under intimation to the Cabinet Secretariat. A serious view must be taken against any deviation from the established procedure and stringent action must be taken against officials who violate the prescribed procedure.
The committee referred to the "glaring instance" of Raja misleading the Prime Minister by his intimation about the availability of spectrum in the 900 Mhz band which was not available then and was subject to vacation by the defence ministry.
"His assurance to the Prime Minister that he was not deviating from the established and existing procedures was a blatant lie as he deformed and distorted the FCFS policy.
"...facts reinforce committee's unmistakable conclusion that the former Communications Minister deliberately misled the Prime Minister in order to fulfil his nefarious design leading to staggering loss of revenue which also tarnished the image of the country," it said.
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PM consent by inaction
By: moh | 27-Apr-2011Reply | Forward
Simple management principles point out that the responsibility stops with PM and he alone is jointly responsible for the acts and omissions of his cabinet team. After all our PM is the most educated PM and he only used this to support this big loot instead of stopping it from happening. Shame on him and the party who appointed him as PM.
Political awakening
By: D.Narayanasamy | 27-Apr-2011Reply | Forward
The entire bunch of crooks are answarable to the God.The god is waiting to punish these politicians.
PAC report
By: M.Boothalingam | 27-Apr-2011Reply | Forward
Draft PAC report has nothing new as most of what they said are in public domain.and the congress and DMK will continue to deny the truth. UPA is mired in corruption and only Supreme court can help people of India to recover the money looted by these shameless politicians
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