No loss to nation,CAG got it wrong,says Sibal

He added however,that Raja may have committed procedural irregularities in implementing the first-come-first-served policy as highlighted by the CAG,and that this aspect “must be taken very seriously”.

According to Sibal’s statement,the Prime Minister and finance minister never asked Raja to auction spectrum or look for ways to revise the entry fee. They only forwarded a set of suggestions for grant of new licences/spectrum received from several quarters to Raja.

When Raja replied that due to the need to maintain a level playing field,it was not possible to revise the entry fee,the PM accepted his view. The PM,Sibal’s statement suggested,was all along kept in the loop by Raja.

“The logic underlying the (CAG’s) estimate (of a Rs 1.76 lakh crore loss) is completely flawed”,the statement said. In any case,government policies are not formulated only for maximising revenues,but also with a view to maximising public welfare,it said.

“We are not talking about the criminal culpability of the matter,” Sibal told reporters. “There could have been irregularities in that sense,and the investigations are on. I am saying that the CAG report has wrongly computed the presumptive loss and I am explaining how.”

According to the minister,Rs 37,000 crore,which the CAG put down to loss on account of ‘extra’ spectrum being given to incumbent operators like Bharti,Vodafone-Essar,BSNL etc.,should be removed from the CAG’s Rs 1.76 lakh crore figure because it was part of approved policy.

Sibal then reduced the Rs 1.39 lakh crore left to Rs 99,000 crore,saying the government had given each of the 157 licencees 4.4 MHz of spectrum — not 6.2 MHz as assumed by the CAG.

This figure was then reduced by half after taking into account inflation (10 per cent each year from 2008 to 2010 when the 3G auctions took place) and other factors.

Sibal then went on to say that 3G spectrum is 3-4 times more efficient than 2G spectrum and reduced the loss to Rs 17,000 crore. And finally made it zero because there is no charge for the start-up spectrum from the operators.

This arithmetic,however,omits the fact that with over 250 million more subscribers added on between 2008 and 2010,the addressable market was lower in 2010,so the prices in 2008 should actually have been higher. Besides,there is no global evidence that 2G and 3G pricing is different,which is why Trai recommended using 3G prices to cost the ‘extra’ spectrum.

What Sibal also did not mention is that the start-up spectrum is bundled with the entry licence fee,which was not revised by Raja.

Sibal’s statement,however,said that criminal investigations were under way,and “the government is totally committed to take stringent action against any person found guilty of corruption or misconduct”.