Wrong to link 2G spectrum value to 3G auction: Mukherjee

NEW DELHI - Finance Minister Pranab Mukherjee Friday said fixing value for 2G spectrum based on the airwaves auction for 3G services was not correct and inferences from the official auditor’s report can be drawn only after a parliamentary review.

“Please remember, these type of calculations, sometimes is made in the hindsight, after seeing experiences in other areas,” Mukherjee said while replying to questions from the audience at the HT Leadership Summit 2010 here.

“In the beginning, I projected Rs.35,000 crore. Now somebody says in my budget projection I deliberately made it an undervalued presentation. I think it would not be correct. But sometimes it happens,” he added.

A report of the Comptroller and Auditor General (CAG) to parliament Tuesday indicted then communications minister A. Raja in the 2G spectrum allocations scam and for causing the exchequer a loss between Rs.58,000 crore ($12.8 billion) and Rs.1.76 lakh crore ($40 billion).

In the 96-page report including annexures tabled in parliament, the auditor sought to spell out what it felt was the potential loss to the exchequer in 2G spectrum allocation in 2007-08 due to policies followed during the regime of Raja.

“The entire process of spectrum allocation was undertaken in an arbitrary manner,” said the report, adding that the estimate of the loss was based on various parameters — without recourse to any “mathematical or econometric models” — and “presumptive” in nature.

The finance minister also said that the report of the official auditor was also interim in nature, since it had to follow the due process laid down for legislative validation.

“It is being examined by the Public Accounts Committee,” he said, adding: “The auditor’s job is to find out the financial irregularities. No, I am not raising doubt about their bonafides. They have done a good job, but that is not the end of it.”

Mukherjee’s comments also come a day after the industry watchdog, the Telecom Regulatory Authority of India (TRAI), recommended scrapping of 69 of the 130 licences given for 2G phone services since December 2006, on account of poor roll-out.

The alleged scandal has become a burning political issue. Both houses of parliament were constantly disrupted for the sixth day Friday, with opposition MPs persisting with their demand for a joint parliamentary committee probe into the 2G spectrum allotment.

The issue has been simmering for over two years and after refusing to resign, saying he had done no wrong, Raja quit his cabinet post late Sunday, ending an opposition-Congress standoff that, however, continues to paralyse parliament over JPC demand.

The government so far has declined the opposition’s demand, saying the Public Accounts Committee of which BJP leader Murli Manohar Joshi is chairman, functions like a permanent joint committee of parliamentary, well equipped to probe any matter.

The committee is also well represented with members drawn from all political parties.