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The UPA's 2G War Within: PC V/s Pranab

A letter dated March 25, 2011 sent by the finance ministry to the Prime Minister office (PMO), over a month after former minister A Raja was arrested and had to step down from the Department of Telecom (DoT), has brought out the UPA's worst kept secret: a war within between its two seniormost ministers, home minister P. Chidambaram and finance minister Pranab Mukherjee.

The 14-page letter, written by Doctor PGS Rao, a deputy director in the finance ministry and addressed to Vini Mahajan, joint secretary in the Prime Minister's office (PMO) at that stage, was part of the factsheet on 2G submitted by Mr Subramanian Swamy at the Supreme Court today.

The revelations come a day after the CBI strenuously opposed Mr Swamy's plea for probing then finance minister P Chidambaram's alleged role in the 2G spectrum scam case.

The March 25 letter, which specifically mentions "this has been seen by the finance minister" [Pranab Mukherjee], says that if Mr Chidambaram , who was Finance Minister in 2008, had "stuck to his stand," spectrum could have been auctioned, instead of being given at throwaway prices on a first-come-first-serve basis.

The letter claims that had the finance ministry continued with the correspondence that it had initiated before the grant of licenses on 10 January 2008, arguing the entry fee of Rs 1651 crore was too low and that the 2001 prices should have been revised, the DoT would have had no option but to accede to the finance ministry's contention. Failing which, the letter says, the licences could have been cancelled.

According to the October 2003 Cabinet decision, the finance ministry is the ultimate authority in the spectrum pricing. These charges of Mr Chidambaram's complicity in the 2G scam had hitherto been made by the opposition, but now it seems that the feeling is shared by the current finance minister himself, who at least seems to be pinning the responsibility on the then finance minister.


This is not all. As the Pioneer's J Gopikrishnan, the journalist who broke the 2G Spectrum Scam story, reported today, even the government’s claim that minutes of the meeting between former Telecom Minister A Raja and then Finance Minister P Chidambaram on January 30, 2008 were not maintained has turned out to be totally misleading. They were prepared and signed by none other than then Finance Secretary D Subbarao:

The meeting, which took place 20 days after the controversial allotment of spectrum by Raja, reveals that Chidambaram said that there was no need to “revisit” the mode adopted by Raja for spectrum allotment.

“FM (Finance Minister) said that for now we are not seeking to revisit the current regimes for entry fee or revenue share,” said point No: 5 of the ‘hushed up’ minutes of the meeting between Raja and Chidambaram.

This observation of Chidambaram clearly shows that he had overruled the then Finance Secretary who had issued directions to stay the allotment of telecom licences and spectrum at the entry fee of Rs 1,658 crore, a price fixed seven years ago. The Finance Secretary had directed the stay on the spectrum allocation on November 22, 2007.

Incidentally, on January 15, 2008 Chidambaram wrote to PM Manmohan Singh to treat Raja’s dubious spectrum allotment as a “closed chapter”.

As the Pioneer story goes on to point out:

On deposing before the Public Accounts Committee, the then Finance Secretary Subbarao said that he had informed Chidambaram, before issuing directive to stay the spectrum allocation. The minutes of the meeting between Raja and Chidambaram shows that Finance Secretary’s objections were overruled by Chidambaram. Perhaps that is why the Government always claimed no minutes was prepared at all.

And now with Mr Swamy's fact-sheet submitted to the SC today, which includes the finance ministry's recent March 2011 note to the PMO to the SC, it is clear that the current finance ministry, under Mr Pranab Mukherjee, is making no secret of what it thinks of Mr Chidambaram's role.

The earlier story of the current finance minister's office being bugged assume additional significance in light of today's revelations and also explain some of the skirmishes between the UPA's two senior-most ministers.

29 Sep 2011, 06:08:18 PM | Buzz

PC: I am happy with the statement made by my senior and distinguised colleague, the finance minister Shri Pranab Mukherjee. I accept the statement. As far as all of us in the government are concerned, the matter is closed.

29 Sep 2011, 06:07:14 PM | Buzz

A group of officials prepared an inter-ministerial background note which was sent to the PMO on 25 March 2011. Apart from the factual background the paper contained certain inferences and interpretations that do not reflect my view.

The policy of the govt in 2007-2008 was a continuation of the policy adopted in October 2003 and as reiterated by TRAI

29 Sep 2011, 06:06:15 PM | Buzz

PM: A no of stories on 2G spectrum had appeared in media in January 2011. A view was taken that a harmonised note based on facts would be produced for use by various representatives of the govt

29 Sep 2011, 06:05:09 PM | Buzz

Pranab Mukherjee: Please settle yourself. Can we start? We are starting?

29 Sep 2011, 03:50:12 AM | Sundeep Dougal

Sanjay K. Jha in the Telegraph: Govt works out note defence - Court to be told 2G background paper has no legal value:

“What more is required when the Prime Minister has said difference of perception should not be seen as rift? The government has more serious work to do than respond to false propaganda on a regular basis.”...

The Congress asserted during the day that the finance ministry note could not have made any difference to the merits of the 2G case. Party spokesperson Abhishek Singhvi said: “Whatever happened in spectrum allocation was in 2007 and 2008. A note prepared by anyone cannot alter the facts of the case. Would the BJP have accepted that Chidambaram was completely innocent had the note in question said he had nothing to do with the 2G case?”


27 Sep 2011, 02:54:00 AM | Buzz

The controversial finance ministry note, that has been described by union law minister Salman Khurshid as merely a “summary” prepared by an official at the lower level, was actually prepared in consultation with the PMO, claims the Finance Ministry officials. Sanjay Jha (who is also the co-founder of Hamara Congress) reports in the Telegraph:

Chidambaram emphatically expressed his sense of hurt and his readiness to quit if the party wanted him to, the sources said. One source said “it is only an expression of intent right now” but added that if the court made any adverse remark tomorrow, pressure would mount on the party to accept that offer...

The response prepared by Mukherjee’s aides contained “documentary evidence” to prove that the controversial note was necessitated because of instructions from the cabinet secretariat, and that the Prime Minister’s Office was involved in the exercise, the sources said.

Other sources in the finance ministry revealed that the note, titled “A copy of basic facts on allocation and pricing of 2G spectrum”, was prepared in active consultation with PMO officials...

They said 22 meetings had been held to discuss the subject in addition to over two dozen email exchanges between the PMO, the finance ministry and the cabinet secretariat. Vini Mahajan, the joint secretary in the PMO to whom the note was sent by P.G.S. Rao, deputy director, infrastructure and investment division of the finance ministry, was present at several of these meetings, they said.

The sources cited the elaborate nature of the exercise to claim it conclusively proved that the charge about the controversy being a finance ministry brainchild was “completely baseless and imaginary”.

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