Raja resigns over spectrum row, DMK relents (Intro Roundup)

NEW DELHI/CHENNAI - After adamantly refusing to resign, beleagured Communications and IT Minister A. Raja quit the cabinet late Sunday over the 2G spectrum controversy, ending an opposition-Congress standoff that had paralysed parliament.

After being instructed by DMK chief and Tamil Nadu Chief Minister M. Karunanidhi, Raja drove to Prime Minister Manmohan Singh’s official 7 Race Course Road residence to hand in his papers.

Moments later, Raja told reporters that he was resigning so that parliament could function normally again but insisted that he had done no wrong.

The prime minister has taken temporary charge of the communications and IT portfolio.

Raja has been accused of favouritism in the award of 2G spectrum, causing huge losses to the national exchequer. Raja has denied the charges.

“My leader (Karunanidhi) advised me to tender my resignation to the prime minister…I will prove that I did everything according to law,” Raja said.

“I am committed to country and people. My conscience is very clear,” he added.

The controversy dates back to 2008, when nine telecom companies were issued scarce radio frequencies for offering 2G mobile phone services at a price of Rs.1,658 crore (less than $350 million) for a pan-India operation.

The opposition, based on the price which the exchequer got for the allotment of airwaves for 3G telecom services, says the 2G spectrum allotment resulted in a loss of billions of dollars to the exchequer. Some put the notional loss at Rs.1.76 trillion ($40 billion).

The Supreme Court is to hear a public suit on the issue Monday.

Both the DMK and Raja had insisted for about a week that there was no question of Raja quitting the cabinet because they said he had committed no wrong.

But a disbelieving opposition continued to breathe fire, paralysing both houses of parliament in the process.

The story took a dramatic turn on Friday when AIADMK leader J. Jayalalithaa offered her party’s support to the Congress-led government if it sacked Raja and the DMK walked out in the process.

Although the Congress rejected the offer, informed sources said that the development put enormous pressure on the DMK and Karunanidhi.

The prime minister and Congress president Sonia Gandhi, who also heads the ruling United Progressive Alliance, had an unscheduled meeting Sunday to discuss the Raja issue.

As the day progressed, Karunanidhi, who enjoys a close rapport with Gandhi, agreed that Raja had to go.

Raja then flew from Chennai to New Delhi, sparking speculation that he was on his way out. In Chennai, the DMK put out a brief statement stating tht Raja had been asked to quit so as to allow parliament to resume its democratic functioning.

The statement added that even though Raja had only pursued a communications policy unveiled in 1999, he had become the target of the opposition over the 2G spectrum allocation.

Even as Raja met the prime minister, Congress spokesperson Jayanti Natarajan admitted that he had quit.

The development came three days after Speaker Meira Kumar adjourned the Lok Sabha Thursday for the rest of the week after the opposition protests crippled the house.

Both houses are to meet Monday, and Manmohan Singh is expected to make a detailed statement on the subject.

According to top Congress sources, matters came to a head when the Supreme Court asked the solicitor general last month as to why the prime minister had not responded to the representation made by the opposition to sanction proceedings against Raja.

The government was even forced last year to order a probe into the issue by the Central Bureau of Investigation (CBI), which in its initial report said the 2G spectrum was awarded on a first-come-first-served basis at the 2001 rates without any competitive bidding.

The opposition even said aid a new player like Swan Telecom, which bought licences for 13 circles with the necessary spectrum for $340 million, sold a 45 percent stake soon after to the UAE’s Etisalat for $900 million.

This made its book value swell to $2 billion without having a single subscriber.

Similarly, realty major Unitech paid just $365 million as licence fee, but sold a 60-percent stake to Norway’s Telenor for $1.36 billion later, taking its valuation to nearly $2 billion, again without a single subscriber and a non-existant network.

In sharp contrast, the 3G spectrum auction that concluded in May secured the exchequer a whopping Rs.67,718.95 crore — an issue that made the opposition raise its pitch against the manner in which the airwaves were allotted earlier.