Vinod Rai - Major Audits - 2G Spectrum Allocation

2G Spectrum Allocation

He is widely credited for the report on issue of Licences and Allocation of 2G Spectrum which resulted in a huge controversy in India. The report estimated that there was a presumptive loss of 176,645 crore (US$30 billion). In a chargesheet filed on 2 April 2011 by the investigating agency Central Bureau of Investigation (CBI), the agency pegged the loss at 30,984.55 crore (US$5.3 billion)

On 2 February 2012 the Supreme Court of India on a public interest litigation (PIL) declared allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A. Raja (then minister for communications & IT) the main accused. The court further said that A. Raja "wanted to favour some companies at the cost of the public exchequer" and "virtually gifted away important national asset".

However, the Presumptive Revenue loss calculation has never been established and has at best remained a conjecture .On 3 August 2012 when according to the directions of the Supreme Court, Govt of India revised the spectrum price to Rs 14,000 cr as reserve price for 2G spectrum and decided to sell airwaves in Delhi, Mumbai, Karnataka and Rajasthan for 1800 MHz band, and pan India for the 800 MHz band the response was poor to say the least . The Government then announced that it would auction the unsold spectrum in the 1800 MHz band from the 2012 spectrum auction, immediately after the first round, which began on 11 March, got over in order to comply with a Supreme Court order. The government also reduced the reserve price for 1800 MHz by 30% and for 800 MHz by 50% from the 2012 spectrum auction.

Response to the 2013 spectrum auction was also very poor. While there were no bidders for spectrum in 1800 MHz and 900 MHz bands, MTS India was the only bidder for airwaves in 800 MHz band. Airtel and Idea were reluctant to participate in the spectrum auction for due to steep pricing of the auction. However it needs to be noted that the economic condition of the country and the world at large is poor and is still reeling from the global recession. This could be a factor for the auction to fetch low prices. It can be argued that the time at which the spectrum was given away the economic condition was good and if the spectrum was auctioned back then, the figure quoted by the CAG could be easily achieved. However based on the present condition and the slight failure of the auction, the political class did try and score brownie points by criticizing the CAG. One of the examples is a quote by congress leader Manish Tiwari who went on to irresponsibly say "Where is the loss Mr.CAG". Of course he conveniently forgot to realize that the losses were calculated based on the economic condition of the country.

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Comptroller And Auditor General Of India - Prominent Audit Reports - 2G Spectrum Allocation
... A CAG report on issue of Licences and Allocation of 2G Spectrum resulted in a huge controversy ... litigation (PIL) declared allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A ... the Supreme Court, Govt of India revised the reserve price for 2G spectrum to 14,000 crore (US$2.55 billion) ...