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BJP-Congress juggle between PAC and JPC Joshi Gains

Updated: May 21, 2011 11:42 am

Political parties have been conveniently shifting their stand over how to get to the bottom of multi-crore 2G spectrum scam, ever since it came to light. A probe through Public Accounts Committee (PAC) was not the priority of BJP, while Congress was quite happy with PAC. Now BJP is high on PAC while Congress wants it (PAC) wound-up. However, BJP veteran Murli Manohar Joshi has emerged politically stronger through these twists and turns.

                The Congress at one time was dead against Joint Parliamentary Committee (JPC) probe into 2G scam, while the BJP was so bent on having JPC that it virtually stalled a whole session of Parliament. The Congress was then telling BJP, that a PAC headed by Joshi is already probing into 2G scam, so there was no need for a JPC. Congress even tried to extol Joshi, saying he is a veteran Parliamentarian. In fact, Prime Minister Manmohan Singh promised not just full cooperation of his government to Joshi-led PAC probe, but also offered to appear before PAC, if called for, but the BJP was then not satisfied. The latter wanted JPC at any cost.

                Thereafter, reluctantly Congress agreed to set up JPC headed by Congress leader PC Chacko. But soon things began to change. Joshi, who was considered to be inconsequential by the Congress and a spent-force by his own party, suddenly became a big threat to Congress-led UPA, when he summoned as keywitnesses the Cabinet Secretary KM Chandrasekhar and Principal Secretary to the Prime Minister TKA Nair. What got Congress-led United Progressive Alliance (UPA), comprising the DMK, more worried is when they got the inkling that Joshi was keen on finalising PAC findings, before his term ended on July 30. The UPA combine then began insisting that PAC should drop the whole inquiry and let the JPC inquire into the whole thing unhindered.

                The tables had turned, now the BJP wanted PAC, and Congress wanted JPC. The BJP wanted to focus on PAC, knowing well that with their own man at the helm of the probe, there was a greater scope of political advantage, that of causing damage to UPA. The BJP realised it had a better chance of indicting the government (UPA) in PAC. A wisened Congress, on the other hand, saw its own reputation safer in the hands of Chacko-led JPC. On many counts UPA also contended that since the matter was sub judice and criminal investigation was on, the PAC inquiry would unnecessarily double the effort and cause confusion. The UPA also argued that there was no PAC inquiriy into Bofors, Harshad Mehta and Ketan Parekh scams. The BJP, on the other hand, claimed, it did not matter even if double probe took place.


The BJP is alleging that the Congress has devaluated the democratic institutions like PAC. Its behaviour in the PAC meeting was against the rules. What is your comment?

The allegations are completely false. We believe in democracy and democratic institutions. We are parliamentarians. How can we defy democracy? In our democracy, majority is followed. The Committee prepared the report but without the consent of all. We suggested that more witnesses should be called, but it was not accepted. Second, we demanded some more time to study the documents collected. We raised these two demands in two successive meetings. But these were ignored. PAC is a very prestigious Committee of the Parliament and it has too many powers. But it has been ruined by Chairman MM Joshi. He has damaged this committee only because, he is an extremist. He himself questioned all the witnesses. He never gave any chance to other members to present their point.


What are your main objections to the report?

We were given the draft report all of a sudden on April 27 and were asked to accept it. We went through it and found that there were many inconsistencies in the draft. Second, if you accuse someone, you must give him the opportunity to present his point. But this Committee did not follow this rule. It did not call all the witnesses and the accused. The draft report is not based on the facts. There are differences in the recommendations and the draft prepared by the secretariat. Their recommendations are not in coherence with the witnesses.


BJP MPs are saying that these errors are only clerical errors.

How can you say that those are clerical errors? It is written in the report that a meeting was conducted on April 16 and many witnesses such as Cabinet Secretary, Principle Secretary to PM, deposed there, but actually no such meeting took place. They are lying. Grammatical or spelling errors can be called clerical errors. In fact, they were in a hurry. They wanted to impose the report on us. Therefore, we decided to oppose it. In fact, we were left with no other option. So, we demanded voting on the report. But Dr Joshi ran away from the meeting.


But the BJP is saying that Dr Joshi didn’t run away from the meeting. He actually adjourned the meeting before leaving it.

No. This is not true. Before he could utter the word, “adjourned”, I rose with the resolution rejecting this report and this was supported by 10 other members at that time. He got up, and while leaving he adjourned the meeting. I can prove it by the proceedings of the meeting. I never allowed him to say the word “adjourned”. And what did he want to get by adjourning the meeting? You can approve the report by consensus or majority only, not by hypocrisy. Therefore, when he left the meeting, we—the 11 members—gave in writing that we were rejecting the report.


You have demanded more time but there was a deadline for the report of April 30. The term of the committee was ending on the same date.

No. This is BJP’s political drama. The term of PAC lasts with the term of the Parliament. Only tenure of some members of the Committee was ending. Tenure of many other members including Dr Joshi and mine, will continue. And if the BJP wants, Dr Joshi may continue as the Chairman of PAC too, as it is the rule that the main opposition party will appoint its chairman of the Committee.


So, your point is that there was no hurry to prepare the report and approve it. More time could be taken.

There was absolutely no hurry. This was the first time that PAC came to this point of crisis. It never happened before and the credit for this completely goes to Dr Joshi. He should have the competence to run a committee with consensus, in which he failed miserably.

Interviewed by Ravi Shankar

  Thus on April 28, when the PAC met to finalise the report the battle lines were drawn. Joshi had deftly circulated a draft report among PAC members beforehand, which was to be adopted. The UPA members were incensed to find the report making severe indictments, not only against former telecom minister A Raja but also against the Prime Minister’s Office (PMO), as well as against present Home Minister and the then Finance Minister P Chidambaram, for failing to take action against those responsible for causing a huge loss to the exchequer. The report had deplored the fact that Mr Chidambaram at the time of grant of telecom licenses in 2008, recommended to the Prime Minister to “treat the matter as closed”.

                “The Finance Minister in his note dated January 15, 2008, acknowledges that spectrum is a scarce resource and the price of spectrum should be based on its scarcity value and efficiency of usage, but made a unique and condescending suggestion that the matter be treated as closed,” the report said. The report castigated the FM for failing to take stringent and swift action against those responsible for the losses.

                “The former communications and IT minister A Raja manipulated the powerful Telecom Commission, the Department of Telecom’s decision-making body, to favour the companies in granting 2G licenses in 2008,” the draft PAC report into the 2G scam said. It also pointed out how the DoT under Raja bypassed the Telecom Regulatory Authority of India (TRAI) on important issues, particularly those relating to the grant of new licenses.

                The draft report gave yet another new figure of loss to exchequer. It said the loss amounted to the tune of Rs 1.90 lakh crore in the grant of 122 licenses in 2008 dual-technology licenses and extra spectrum. It may be recalled that the Comptroller and Auditor General (CAG) in its report on November 15, 2010, had put the loss as Rs 1.76 lakh crore to the exchequer due to spectrum scam.

                The report also came down heavily on the PMO and the Cabinet Secretariat for failing to respond to the situation and taking corrective action. Not sparing even Prime Minister Manmohan Singh the report said “the Prime Minister wanting to keep the PMO at arm’s length” from the 2G spectrum issue, seemed to have given an “indirect green signal” to the former telecom minister A Raja to go ahead and execute his unfair, arbitrary and dubious designs.

               Given below are excerpts of draft report of PAC on 2G spectrum scam


The Committee are highly perturbed to note that the considered and imperative advice given by the Prime Minister and genuine concerns expressed by him on the developments in the Telecom Sector in his letter dated 2nd November, 2007 to the then Minister of Communications and IT, was just disregarded by him. The Prime Minister, was in fact misled when he was informed by the Minister that the issue of auction of Spectrum was considered but not recommended by the Telecom Commission and also not recommended by TRAI. The Minister was saying half truth, concealing the other half concealing his ulterior design. As a matter of fact and as has been reported to the Committee, the TRAI recommendations of August, 2007 was never placed before the Telecom Commission nor discussed by them between the date of submission of the TRAI’s recommendation and the date of Minister’s letter. The officials of the DoT who are the full time Members of the Commission considered the TRAI recommendations and the Finance Secretary and other part time Members were deprived of the discussion on such an important matter. Secondly, it was not even thought proper to consult TRAI for a second opinion on their ‘No Cap’ recommendation which led to a spurt in the number of applications for UAS Licence. Not only that, the MoC&IT arrogantly termed the suggestions of the Minister of Law and Justice to refer the Spectrum related matter to on EGOM, as “out of context”. He audaciously informed the Prime Minister that the cut-off date has been fixed as 25th September, 2007 on the plea of shortage of spectrum whereas on another occasion he apprised the Prime Minister that there was enough scope for allotment of Spectrum to few new operators even after meeting the requirements of the existing operators and licencees. Another glaring instance of his misleading the Prime Minister was his intimation to the Prime Minister about the availability of Spectrum in the 900 MHz band which was not available then and was subject to vacation by the Defence Ministry. His assurance to the Prime Minister that he was not deviating from the established and existing procedures was a blatant lie as he deformed and distorted the FCFS policy. To top it all, his tone and tenor of the 26th December, 2007 letter to the Prime Minister that since the file for issue of the LOI had been approved by him on 2nd November, 2007, he proposed to implement his decision without further delay demonstrated his arrogance and sense of one upmanship bordering on open defiance. All the above mentioned facts reinforce the Committee’s unmistakable conclusion that the former Communications Minister deliberately and disminedly mislead the Prime Minister in order to fufil his nefarious design leading to staggering loss of revenue which also tarnished the image of the country.

The Department’s reply in the defence of their Minister furnishing comparative figures of increase in tele-density, rural telephony and decrease in Average Revenue per User (ARPU) and tariff is not neither convincing nor tenable. The Committee outrightly reject the contention that since Spectrum was given in 2007-08 at a throwaway price, it led to increase in tele-density and a fall in tariff. By the end of 2007, there was enough competition in the Telecom Sector, the tele-density was showing encouraging upward trend and the tariff was coming down at a noticeable pace because of the competition, technological advances and the market dynamism and certainly not due to allotting Spectrum at a dirt.

So far as the role of the PMO was concerned, the Committee find that despite noting the Communications Minister’s decision not in conformity with the Transaction of Business rules which provide that “cases in which a difference of opinion arises between two or more Ministers and a Cabinet decision is desired, shall be brought before the Cabinet”, the PMO did not enforce the above Transaction of Business Rules to sort out the difference of opinion between the Minister of Law and Justice and the Minister of Communications and Information Technology.

The Committee’s examination reveals a strange sequence of events relating to the processing of the Communication Minister’s letter dated 26th December, 2007 in the PMO. The processed commenced from 31st December, 2007 and closed on 31st January, 2008. The Communications Minister’s letter and the External Affairs Minister’s note with a suggested course of action was submitted to the Prime Minister on 7th January, 2008, after 12 days of the Communications Minister’s letter. On 11th January, 2008, the Private Secretary to P.M conveyed the desire of the PM to take into account the developments concerning the issue of licences. It is pertinent to note here that the UAS Licences had already been issued on 10th January, 2008. The file was resubmitted to the PM on 15th January, 2008 with a clarificatory note. The file was received back with the Private Secretary to the PM’s note that the “Prime Minister wants this informally shared with the Department” and does not want a formal communication and wants PMO to be at arm’s length”. The sequence of events this testifies some unfortunate omissions. On 3rd January, 2008, by just acknowledging the Minister’s letter, the PM seemed to have given his an indirect green signal to go ahead with his plan and decisions. What concerns the Committee is the fact that when the Communications Minister was in such a hurry to implement his decisions, there was no plausible reason to submit the file to the PM after 12 days. Secondly, there is no logic in conveying the Prime Minister’s desire to take into account the licence issues on 11th January, 2008 when the process had already been over a day before. Thirdly, there is no justification to share such important issues with the DoT in an informal manner. The last but not the least, the Prime Minister’s desire to keep the PMO at arm’s length indirectly helped the Communications Minister to go ahead and execute his unfair, arbitrary and dubious designs.

The Committee are shocked and dismayed to note that the Finance Minister, in his note dated 15th February, 2008 acknowledged that Spectrum is a scarce resource and the price of Spectrum should be based on its scarcity value and efficiency of usage but made q unique and condescending suggestion that the matter be treated as closed. The Committee believe that ends of accountability demand that any wrongful loss caused to the Government is made good and the guilty brought to justice. The Committee view it most unfortunate since the Finance Minister, the guardian of the public exchequer – and entrusted with the principal task of mobilization of resources for public welfare, instead of initiating stringent and swift action against all those responsible for the whopping loss to the exchequer, pleaded with the Prime Minister to treat the matter as closed. The Committee cannot rest satisfied unless the matter is probed in its entirety and the reasons for such an unusual act on the part of Finance Minister are explained to the nation. Further, the Committee find the role of the then Secretary, DEA deficient and wanting as he failed to bring the matter to the notice of the Cabinet Secretary or even in writing to the Finance Minister even after irregularities became public and there was public outcry for huge loss to the public exchequer. The Committee seek explanation from the then Secretary, DEA and all those who chose to be silent bystander or rather indulgently condescending and pleaded for forgetting the loss and treating the chapter as closed.

The Committee take note of the assertion of the Prime Minister before the Editors of the Electronic Media on 16.02.2011 and in the Rajya Sabha debate on 24.02.2011 that he did not proceed in the matter or pricing of Spectrum as he was informed on 4.07.2008 that the Ministers for MOC&IT and Minister of Finance had worked on agreed formula on Spectrum charges in line with the TRAI recommendation. The Committee are of the view that the said agreed formula if any, was reached between the two Ministers after six months of the allocation of UAS Licence/2G Spectrum. The point remains to be answered as to what preceded 10th January, 2008 and reasons for everyone remaining mute spectators till the damage was done. In any case, the Committee would like both the Ministries to furnish them the agreed formula on Spectrum pricing/charges as arrived at by both the Ministers.

The Committee would further like to point out that the Prime Minister’s statement that revenue generation has never been a primary consideration is self-contradictory in view of his own statement in India Telecom – 2007 to the effect that the revenue potential to the Government must not be lost sight of as Government across the globe have harnessed substantial revenue while allocating Spectrum. The PMO is required to reconcile the two divergent views of the Prime Minister.

The PAC draft report was submitted by PAC Chairman Joshi to Lok Sabha Speaker Meira Kumar, amidst stiff opposition from the Congress and DMK members in the Committee. They alleged the report was “full of lies” and did not have the endorsement of a majority of the PAC members.

                The latter had charged Joshi with distorting facts, with not allowing them to have their say, with not taking the view of the majority by division of vote. They had also charged him with “outsourcing” the report and also “leaking” the report before being circulated and considered by all the members.

                Even as 11 of the 21 members of the PAC had rejected the draft report, Joshi decided to go ahead and submit the report to the Speaker for being tabled in the Parliament. When the UPA members in the Committee such as KS Rao, Saifuddin Soz, Arun Kumar and Navin Jindal vehemently opposed and demanded for a division of vote Joshi walked out saying he would be submitting the report to the Speaker. Joshi said later as Chairman of the PAC he was empowered by rules of Parliament to submit the findings examined by the PAC to the Speaker, so that it may be tabled in the Parliament. Joshi insisted that he had followed the rules and procedures of Parliament.

              PRESUMPTIVE LOSS

The Committee note with profound concern the nation-wide public shock and indignation over the gross irregularities in the allotment of 2G spectrum and the colossal fiduciary loss caused to the public exchequer. Well before the C&AG report was tabled in Parliament, in his petition to the Supreme Court, Shri S Swamy calculated a net loss of Rs 97,410.74 crore and Shri BK Syngal, a well known telecom expert and former CMD BSNL quantified the possible loss between Rs.70,000 to Rs.80000 crore based on a multiple of indicators… The C&AG based on a set of parameters pegged the presumptive loss at Rs.1,76,645. The CBI calculated the loss roughly between Rs.40,000 crore to Rs.50,000 crore based on the premise of the profits made by Swan and Unitech by sale of equity. The CBI however clarified that they were concentrating the investigation on criminal conspiracy and the money trail. The Committee are, however, shocked to note that pending their examination of the C&AG Report, the Minister of Communications and Information Technology addressing a press conference on 17.1.2011 described the presumptive loss calculated by the C&AG as ‘utterly erroneous and embarrassing to the Govt’… The Committee feel that giving dual technology licence to the CDMA operators and new UAS licences in 2007-08 at a price determined in 2001 was not only imprudent but also smacks of a design. Ignoring the voluntary offer of a Company to pay much more than the 2001 price even without auction did not persuade the Government to realize the true market price of spectrum. Similarly, allotment of additional Spectrum, beyond the contractual amount, to the GSM operators was at a cost to the exchequer which the Department themselves have realized and are reportedly taking measures to recover it.

The seven members of the PAC led by Congress MP KS Rao sought Joshi’s resignation as PAC chief. The former told the press, they would meet Speaker Meira Kumar and seek her protection for their rights as members of PAC. “The chairman cannot be allowed to bulldoze the report through,” he said. He also charged that Joshi showed a “pre-determined biased mind,” as he had included in the report deposition of Cabinet Secretary and Principal Secretary to the Prime Minister when they did not appear before the Committee. (However, they had given their responses to the questions sent to them). Saifuddin Soz charged Joshi with not calling the witnesses they had asked for examination.

                Nevertheless, with Lok Sabha Speaker Meira Kumar re-appointing Joshi as PAC chairman on May 1, the veteran BJP politician had won this round of battle. The Speaker, a veteran politician herself, had simply gone by the rules and not swayed by the tempers running high in her own party (Congress). Whether the Speaker accepts Joshi’s draft PAC report or suggests something else is totally her prerogative.

                But the fact remains that through the twists and turns over PAC and JPC between the two major political parties—the BJP and the Congress—the real gainer is the 77-year-old veteran old political war horse from Kumaon Hills, who is best remembered for hoisting the tri-colour at Lal Chawk in Jammu and Kashmir at the peak of militancy.

By Bisheshwar Mishra







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