Joshi formula among 3 CAG used to estimate 2G loss

CAG told audit team to go by what PAC felt; 'even a school student can do it,' Joshi explained.

One of the three formulae used by the Comptroller and Auditor General to calculate the loss to the government for selling 2G spectrum on a first-come-first-served basis was suggested by BJP leader and Parliament's Public Accounts Committee (PAC) chairman Murli Manohar Joshi.

When the team conducting the audit said they "are not on strong ground" in basing the loss on the formula suggested, they were told by CAG headquarters that PAC members felt the calculation "could be directly attributed to spectrum allotted", according to documents accessed by The Indian Express.

The formula in question was based on the equity infusion through FDI in two companies, Swan and Unitech, that had won 2G licences in 2008. This was extrapolated to arrive at a loss figure of Rs 57,666 crore and Rs 69,626 crore respectively in the controversial CAG report tabled in Parliament.

"Even a high school student can do it. We have been taught this. You sold me something at 'x' price. A part of it, I sold it at price 'y'. 'y' minus 'x' is what I have gained. Now, say, this is a certain percentage of the total. Raise it to 100 per cent and I get the total amount which at that point of time is worth. That would have been the value which the government or the country would have received," Joshi told then finance secretary Ashok Chawla during a PAC meeting on June 30, 2010.

Joshi's explanation came after Chawla told him that the loss on account of not auctioning the 2G spectrum "cannot be assessed," according to the minutes of the PAC meeting. The meeting was also attended by CAG Vinod Rai, deputy CAG Rekha Gupta, director general (report central) R B Sinha, principal director (report central) Shubha Kumar and DG post and telecommunication R P Singh, who was responsible for conducting the audit. Besides, other PAC members, including those from the Congress, were also present.

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