FSRH I : 2G SPECTRUM SCAM

Updated: Mar 29, 2021

2G SPECTRUM SCAM 2G Scam - As the old adage says, power corrupts. It’s not uncommon to hear about leaders taking advantage of their power and position at the behest of their allies. India’s social and political fabric is not new to such executive power abuse with scams like CWG and Bofors.

One of the scams involving misuse of political power is the 2G Scam.

Orchestrated by the politicians and bureaucrats, the 2G Spectrum is one of the biggest scams in the history of Independent India. A report by the Comptroller and Auditor General Of India pinned a loss of ₹1.76 Lakh Crore to the Government exchequer due to lowball pricing of 2nd Generation mobile phone spectrum allocated under the then Telecom Minister A. Raja. The 2G scam made its place in Time Magazine’s Top 10 Abuse of Power.


2G SCAM - WHAT ACTUALLY HAPPENED?

In 2007, the Department of Telecommunication (DoT) initiated the process of spectrum allocation for the 22 telecommunication zones in India, which were allotted on a first-come, first-serve basis at much lower 2001 prices. This was done to favor certain companies without following the mandatory procedure of competitive pricing. The 122 licenses were given for a little over ₹9000 crores, while 3G auctions for a smaller no. of licenses had fetched the government ₹ 69,000 crores in revenue.

Moreover, licenses had been issued to ineligible applicants who had deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means to gain access to the spectrum.

THE REPERCUSSIONS OF 2G SCAM.

In 2009, after receiving complaints against cases of corruption in spectrum allocation, the Chief Vigilance Commission directed CBI and CAG to take the inquiry forward. The CAG report estimating the loss of revenue turned this complex and dodgy telecommunication deal into a political fiasco.

Several petitions were filed in the Supreme Court leading to the cancellation of the licenses on the grounds that they were issued in a “totally arbitrary and unconstitutional manner”. The Supreme Court also ordered the creation of a Special Court for speedy trial of the cases. After almost a decade of court proceedings, the Special CBI Court in 2017 acquitted all the accused. These bureaucrats and politicians were acquitted not because they were innocent but because of our system’s inability to prove their crime.

CONTRADICTIONS

The CAG audited report estimated a loss of 1.76 lakh crore to the government, while in an independent audit by the CBI the loss of revenue was estimated to be 30000 crores, around one-sixth of the original estimation. Also while the Supreme Court in its ruling canceled all the licenses along with imposing hefty fines on the companies, the Special Court acquitted all those who were accused guilty, opening up the possibility of these telecom companies seeking damages.

Nonetheless, whatever may be the loss from this scam and whether it was a case of corruption or inefficiency and opacity, it strongly points towards the embedded power dynamics in the executive structure of the country. It is the infuriated taxpayers and general public who are the most affected by these scam yet have the least voice in matters which concerns them the most.

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