Govt Attacks CAG On 2G Spectrum Figures
After the flop 2G spectrum auction that yielded only Rs.9,407 crore, Government and the Congress today questioned the Comptroller and Auditor General's estimated loss of Rs.1.76 lakh crore in the spectrum allocation of 2001, drawing fire from the opposition.

Information and Broadcasting minister Manish Tewari led the government attack by asking CAG Vinod Rai as to why the spectrum auction had not yielded anything close to the loss it had estimated.

"Mr CAG, where is the 1.76 lakh crore? I think it is time for some serious introspection. Its time the CAG introspects on his processes and it is high time that the BJP and some of the other opposition parties, which had made this their holy grail and swansong of politics over the last two years, should publicly apologise," Tewari said while speaking to reporters.

Congress leader Digvijay Singh also took a dig at the national auditor's estimate of loss in the 2G spectrum allocation in 2001.

"The CAG should reconsider how far its estimate was right with regard to the report, which it had earlier given and the losses that it had computed (in spectrum allocation two years ago)," Singh said.

BJP hit back at the government. "Government keeps looking for ways to attack constitutional institutions like the CAG which are acting in a fiar and independent manner," party vice president Mukhtar Abbas Naqvi said.

Singh sought to dismiss the suggestion that the auction yielding less revenue this time is a reflection of disenchantment of telecom companies with the government.

The government was targeting a minimum of Rs 28,000 crore from the sale of 2G spectrum in the GSM band and the tepid response may upset its efforts to meet the revised fiscal deficit target of 5.3 per cent of GDP.

Overall, the government had budget Rs 40,000 crore as revenue from spectrum sale this fiscal.

The CAG had in 2010 said the then Telecom Minister A Raja's decision to give away spectrum at rates fixed in 2001 had caused a presumptive loss of Rs 1.76 lakh crore to the exchequer.

CPI-M's Nilotpal Basu also lashed out at the government gunning for the CAG.

"If the government argues like that, it will only be the Devil's advocate. Because, you will always have to remind yourself of the fact that the then telecom minister A Raja gave out 122 licenses for Rs.9,200 crore.

"Thus, the 22 licenses which were out on auction this time have already fetched more than what they had got for all the 122 licenses then," he said.

Former CAG T N Chaturvedi came out in support of Rai. "He (Rai) examined the situation at that particular point of time. He is not a crystal gazer. He couldn't have anticipated, as some papers have said, that the banks are reluctant to give loans because the market has slowed down," he said.

"There are difficulties in the telecom sector. For that you can't hold the CAG responsible. There was such a rush then. Probably, things are stabilising. They (telecom operators) are getting much more realistic. So far as the CAG is concerned, at that point of time, he assessed the whole thing and can't take responsibility for it later on," he said.
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Digression

28/D-51
Nov 17, 2012
01:32 PM

>>Sorry - wrong on multiple levels - if the actual value of this spectrum was 1.76L Cr. then a reserve price of 45,000 Cr. would not matter - basic auction theory

Basic auction theory means market discovery of prices. If you have already decided 1.76lakh to be the value of spectrum, there is no reason to have an auction. There is a logical fallacy in your argument.

>>First, the CAG gave THREE figures of presumptive loss not actual loss&quot;</p> <p>What is the point of giving three estimates that vary so widely? Why did the super CAG insist on putting down an estimate which valued 2G using prices for 3G? 3G was a new technology, being introduced first time in the country, every one was a new entrant and desperate for getting a 3G license - in the case of 2G, people getting new licenses would have been players #5/6/7 in already existing competitive landscapes. Does the CAG&nbsp;not know that apples and oranges are different?

The current auction also proves the other two presumptive loss figures to be wrong. The CAG never stated that 1.76lakh crore is the most authentic number among the three. Secondly, you seem to be obsessed with this number, but the auction took place because of SC judgment and the judgment cancelling the licenses and ordering for auction did not state these presumptive loss figures as the reason. So, essentially you are busy creating and slamming a straw man.

>>Vodafone's retrospective tax is on the topic of taxing merger transactions, has nothing to do with telecom.

Regulatory conditions do not have to relate to telecom for it to affect the sector. Vodafone case is just the kind of reason foreign investors are skeptical of investing in India.

>>There is no difference in economic conditions and financial conditions that justifies a 95% reduction in value of telecom spectrum in 4 years

Typical, I give a number of reasons and you pick up only the last one and interpret it as the sole reason! Nice.

Ok, assuming you do not accept the 1.76l cr figure to be correct, the other loss figure was around 60,000 crore. Can you explain the reason for an 85% fall in value?

>>The conclusion is inescapable - the CAG&nbsp;is numerically challenged

The inescapable conclusion is that people still try and makes excuses for this corrupt, smug and incompetent government by deflecting the blame to the CAG.
 

RSM, Delhi
27/D-32
Nov 17, 2012
11:50 AM

>>He fostered competition, lowered prices and earned billions in 3G auction for the country

Absolute BS!

RSM, Delhi
26/D-98
Nov 16, 2012
08:28 PM

>> Not only that. Raja should be reinstated as a cabinet minister after offering due apologies.

Correct. Bringing Raja back is the only way to get out of the spectrum mess. He fostered competition, lowered prices and earned billions in 3G auction for the country. No doubt he is thousand times more capable than CAG, Subramanian Swamy and the SC judges combined. 

Rajesh, Phoenix
25/D-86
Nov 16, 2012
07:15 PM

 "Vinod Rai should resign".

Not only that. Raja should be reinstated as a cabinet minister after offering due apologies. After all, if there is no loss and no scam, why should he suffer?

Anwaar's demand should go all the way.

Rakhal, Philadelphia
24/D-84
Nov 16, 2012
06:19 PM

How this guy was promoted to the post of CAG shows, how many educated fools are in India? "

KEL SHOREY, GLASGOW

Manmohan Singh appointed Rai as CAG .
Please take up the issue with M M Singh .
By the way if ypour PF Fund due have not been settled by CAG yet to whom you approached then please send me relevant data I will take up with PF Commissioner who not the CAG is the authority to settle PF Case.

ASHOK KUMAR GHAI
Mumbai, India
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