Friday, February 18, 2011

‘Everything shows that the Prime Minister knew and did nothing about the (telecom scam)’

SUNIL JAIN: Kapil Sibal claims A Raja followed what the NDA government had done on spectrum allocation. As telecom minister during the NDA government, can you explain what you did?
Arun Shourie: People today cannot visualise what the the telecom sector was like at that time. Tele-density today is 60 per cent, at that time it was 4.1 per cent. There were large parts of the country where despite bids being invited, not a single operator had bid. There were parts of the country where bids had been won and licenses had been granted and their services had not yet been activated. For example, Northeast, where nobody had taken the licence. The whole sector was collapsing. It was rescued from that by shifting from fixed fee to revenue sharing. A third factor was that there were 20 types of licences and fees and this led to much litigation. The whole sector was caught up in litigation--we have had a small glimpse of that in the exchange of letters between Mr Rajeev Chandrasekhar (Rajya Sabha MP)and Mr Ratan Tata. There were a host of issues related to licences and subsequent litigation and Ataliji (Prime Minister Vajpayee) told me that this sector needed cleaning up. I felt the main problem was the splintering of licences. This was one of the two or three sectors which was still left in the licence quota raj phase. I felt we must unify licences and the government should be technology neutral, it should be service-provider neutral, it should be service neutral. The idea emerged for a unified licence, in which a service provider can provide any service to any user anywhere in the country using any technology. This matter was referred to TRAI. TRAI wrote a very good report at that time (October 2003), the substance of which was that you should be technology agnostic, don’t go in for a universal licence in one go because it will lead to complications. They suggested we do it in two phases.
Sunil Jain: We understand that there was a controversy around Reliance and WLL, which was illegal at that time. TRAI came out with a recommendation, saying let’s go for UASL (Unified Access Service License), which meant that whoever had a fixed licence can offer WLL services. The second recommendation was that having done this, any future person who wanted to offer mobile services, will have to do a multi-stage bidding for that.
Arun Shourie: The concept was you will have automatic authorisation for anybody who wants to come in. With a low entry fee, divorce the spectrum from the licence. Whereas the earlier practice was that spectrum was given as a part of the government obligation for having allowed you to provide a service.
SUNIL JAIN: So TRAI allowed people the option of moving to UASL and in future, if anybody wants to offer a new service, please do multi-stage bidding for that.
Arun Shourie: Only after the unified licensing regime is introduced, please don't forget that phrase. But the unified licensing regime has not been introduced till today.
Sunil Jain: Let us assume for the sake of argument that BJP did everything wrong and was favouring people. Of the licences issued, you issued only some of them, the rest were all issued by the Congress minister. In 2005, the Congress came out with some new guidelines for what the prices should be for UASL. Would this be your answer to Sibal that if you assume we were wrong, in 2005 December when you issued new guidelines, why did you stick to the Rs 1,651 crore price?
Arun Shourie: That is a good argument which I shall remember. But you have to look at the growth in tele-density--that is what determines whether the 2001 price is justifiable or not. Between 2001 and 2003 there had hardly been any improvement in tele-density, but if you use the same price in 2009, then obviously that is wrong when tele-density has increased to 48 per cent. The point about Raja is that he followed no principle, no policy.
First-come-first-served was never the only criteria. When Raja said first-come-first- served, there were 539 existing applications. In a first-come-first-serve situation, those should be processed first. But he didn't process them. He contacted the real estate companies and said bring in your applications with a cut-off date of October 1. Four months later, he made September 25 the cut off date. A large number of applications were removed but not the ones he wanted to favour. Then he changed the basis of the first-come-first-serve process. He changed it from the date and time of receipt of application to the date and time on which letters of intent conditions are fulfilled and paid. That means you must bring Rs 1,651 crore, as CAG says, in 41 minutes. After that, he was still not able to give Swan Telecom the amount of spectrum which he had contracted for and so he changed the priority list in circles which are very lucrative today, like Punjab and Maharashtra and this was the first-come-first-served process. So to say that I am following Arun Shourie’s footsteps is wrong. I have said this many times--Raja, stop following my footsteps, follow my advice. My advice is turn an approver. Even your leader Mr. Karunanidhi has said one man could not have made so much money all by himself, so tell us who are the other persons.
Rishi Raj: The Prime Minister’s silence has been an issue. The Cabinet decision of 2003 said that finance ministry should always be involved in pricing of spectrum. So when Raja did not listen to the finance ministry as well as the law ministry for auction, the two ministries could have independently approached the Cabinet on the matter, which they did not do. How do you view this?
Arun Shourie: That shows the character of the government today. Chidambaram wrote a letter and there are several letters on record written by Subbarao--who's now the RBI Governor, but was then the Finance Secretary--saying don’t do this. By contrast, I discussed every single matter with Jaswant Singh, Finance Minister then and head of the Group of Ministers which considered the TRAI recommendations. More than that, the finance ministry is institutionally represented by the member finance in the Telecom Commission. In Raja’s time, the member finance got so disgusted with Raja’s illegalities that she sought premature retirement. It is my personal knowledge that Prime Minister had called Nripendra Misra, who succeeded Pradeep Baijal as the chairman of TRAI, to brief him. He said that Raja had claimed he was following TRAI recommendations, was that the case or not?
Nripendra Misra said no, he was not. Then Pranab Mukherjee called him and Nripendra Misra told him the same thing. Nripendra Misra came to me after a few months and said this is what they have called me for, what should I do.
I said please put it on record, files last a long time. So Prime Ministerknows from Nripendra Misra, from the press, he knows of the violations reported by every operator. He himself writes a letter saying that complaints that are coming in, please consider a transparent procedure for auctioning the spectrum. As I have mentioned, Sibal is the advocate of Raja and not of the government. Each time he defends Raja, he implicates the Prime Minister.
There were two persons who were handling affairs for Raja, one was Chandolia (Raja's private secretary) and there was another person. Raja was cruel to this other person, he fell out, he sought transfer from the department, started giving out information, none of the journalists wouldtake it. He was receiving threats, lures of money but he was the hero of the entire situation, he kept giving out information. In August-September 2009, I met the PM outside the Rajya Sabha. I told him that ‘under the umbrella of your good name loot is going on’. I showed him a list of the front companies and what Raja was doing. I told him about this person and that he was ready to give the entire evidence on record. I asked if I could meet Principal Secretary TKA Nair. Then I could give him all these papers and CBI or someone could investigate. I waited for one month but there was no call. I then contacted Ashwini Kumar, Director, CBI. I gave him all the papers and said, there is this man and here is his telephone number, he will give you all the evidence. CBI contacted him and had a series of meetings with him. Nothing happened so I asked the CBI what happened and they said, `Sir your man knows everything, we have followed up, everything is ready but we have to wait for a nod of the Prime Minister'. Nothing happened and nothing was going to happen. Then this meteor of CAG fell and Raja was indefensible. All the companies of Raja that have been raided are in the list that was given to the CBI at that time. It turned out to be absolutely correct. The rapidity with which they are able to move right now is precisely because they knew everything already. The Prime Minister has to be encouraged to be a good man, a good man means who enforces goodness in the circles which are under you. In this case, everything shows that Prime Minister knew and did nothing.
Shekhar Gupta: Does the CBI have sufficient evidence to convict people?
Arun Shourie: Yes. I had been told that in one set of transactions, they have been able to track the money trail. I would not be surprised if some of those persons--not just Raja and his advocate Kapil Sibal--are also deflecting attention to a JPC, and other matters. They don’t want the prosecution to proceed.
Shefalee Vasudev: Everything seems to be falling apart--civil society and the state. If you had to start a clean-up process, would you start with judicial reforms?
Arun Shourie: When such situations arise, think of Gandhiji’s phrase: anything, anyone, anywhere, anytime. We should not think of just judicial reforms, police reforms or qualifications for legislators. Many people are now feeling that the situation is ripe for another people’s movement. Political parties feel they don’t have the credibility at the moment, they have to find some non-political faces to start the process. You can guess the names they are gravitating towards--APJ Abul Kalam is one and three former chief justices of India. People feel the situation is ripening for a people's movement--the government is being buffeted, it will continue to flounder.
Ravish Tiwari: The Opposition today is looking for a protagonist. The BJP is going through a power game within its own ranks. There is no protagonist like VP Singh in 1989. What is the remedy?
Arun Shourie: I don’t want to comment on the BJP. But sometimes, erratic things throw up protagonists. I am not saying this is going to happen. It is a very different public today and a very different country where money-making is accepted and looked up to. People have got accustomed to these things. So I am not saying this is the solution. But from random situations, protagonists do rise. For instance, who thought that Mohamed ElBaradei would become the focal point of a people’s movement in Egypt? However, mass movements, even if ignited, can remove but cannot construct. Construction requires a much longer effort.
Soma Das: A few days ago, you said that Pranab Mukherjee is one of the best PMs we are yet to have.
Arun Shourie: He is certainly one person who has goodwill across the political spectrum. He is certainly mature, I don’t know about other things. Many persons are seeing a window of opportunity for themselves between Mr. Manmohan Singh demitting office and Rahul Gandhi not being ready, so ‘kisika bhi number aa sakta hai.’
Shekhar Gupta: Has the CBI been in touch with you?
Arun Shourie: I had rung up Mr. A P Singh, the CBI Director, about two months ago, saying that now that you are questioning former officials like Pradip Baijal and Vinod Vaish, I am sure you would want to question me, so I will come any day. The date has been fixed for February 21.
Shekhar Gupta: Is it your instinctive sense that whatever the CBI is doing is right?
Arun Shourie: They are absolutely on the right track. The reason is twofold: the monitoring by the Supreme Court and second, it is not difficult to be on track when public pressure is so intense. Supreme Court must continue to monitor it like a hawk and public pressure must continue. We must never forget that this is just the first stage, even the investigation is not over. After that the trials will start, appeals will be made, etc. So this requires perseverance.
Amitabh Sinha: Jairam Ramesh has been taking your name in the Lavasa controversy. You live in Lavasa, can you tell us what you think of the case?
Arun Shourie: For reasons that do not have to do so much with the merits of this case, Jairam has taken an extreme position. I had sent him an email in this regard saying, please don’t think of ‘either-or’ but ‘and-also’. Secondly, if the state of India gives clearance to POSCO or Vedanta, and they spend time and money and then, seven years later, you say stop the work, it brings the Indian state into question. In the case of Lavasa, I can tell you, the developers are thinking in terms of a model, they are aiming for international recognition. So they are having bio-mimicry workshops, plantation workshops and hydro-seeding and they take great pride in that. Sitting in Delhi we can’t realise what happens but there were 8,000 workers there, mostly from Bihar with their families and little children and suddenly no work. Many of the local people had opened vegetable shops, milk stalls--all closed. The real issue is that there should be some norms. I am told Jairam will give the clearance on February 14 for the first stage of Lavasa, so I hope that happens.
Ravish Tiwari: In the name of social expenditure, we are spending Rs 30,000 crore on NGREGS while the allocation for rural roads is only Rs 10,000 crore in the budget. Similarly, you are coming out with food security rather than creating infrastructure for storage. So how are these things going to play out for the future of the country?
Arun Shourie: Only educated people who are not going to stand for elections can oppose this. Schemes like NREGS are like throwing money out of the window. Unless delivery measures are improved, all these populist measures are going to boomerang. I opposed this at that time to the great discomfiture of the masters in BJP. Populist measures are a main cause of the current inflation. People like Yashwant Sinha, who work in their constituencies, will tell you this is nothing but centralised corruption.
Ravish Tiwari: Has India lost its story?
Arun Shourie: In America, you are getting just one per cent interest, here it is 8.5-9 per cent. That is why FII money is still coming in. I meet investors all the time, and they are all now expressing concern. They say that the long-term Indian growth story remains but we are all living for the short-term and what about that?
Transcribed by Smita Aggarwal & Sweta Dutta
For the longer version, visit


revealdtruth said...

Arun Shourie seems to be deliberately pointing finger at Prime Minister. The question is that if he himself was aware that there's something wrong with the Spectrum Allocation then why he kept quiet and didn't blow whistle against something which was unacceptable and could turn into a big fraud at that time?

Unknown said...

It is a pity that Shourie has taken sanyas. The country needs him more than ever. These days (april 2011) the Anna Hazare movement is being played out, but i can't escape a feeling that there is something phoney about it: the media managed brouhaha being one of the reasons.

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