There could be two reasons why the Indian National Congress has suddenly raised the bogey of what appears to be an imaginary 'telecom scam'.
One, beset with scams during its regime (coal scam, 2G spectrum scam, AgustaWestland chopper deal, truck scam, CWG scam, cash-for-votes, Adarsh housing society, just to name a few) it feels an urgent need to implicate Narendra Modi in at least one dodgy deal.
Two, sensing that it is isolated on the GST — most opposition parties are keen to see the bill passed— it wants to create at least one point of confrontation that could be used as an excuse to stall the NDA's effort in pulling off the Constitutional amendment required to pass the bill during the upcoming Monsoon Session. It has already made clear this intention.
There is nothing wrong with the political strategy. For a party fighting to save its signboard, it should grab with both hands any chance to put the NDA and Modi on the mat. The problem is, there has to be meat in the allegation for the charge of a scam to stick. Here, the Congress seems to be batting on a sticky wicket.
On Thursday, Congress accused Modi government of trying to "sweep under the carpet a massive telecom spectrum scam worth Rs 45,000 crore" ostensibly to "help a few crony capitalists". Citing a CAG report which found that six telecom operators had under-reported their adjusted gross revenue (AGR) in the period between 2006 and 2010, a belligerent Randeep Surjewala said the telecom ministry is now "delaying recovery of the money" by going for a re-evaluation of the auditor's findings.
The CAG report, tabled in the Parliament in March this year, revealed that Bharti Airtel, Vodafone India, Idea Cellular, Reliance Communications, Tata Teleservices and Aircel had collectively under-reported their AGR by Rs 46,045.75 crore, leading to a loss of Rs 12,488.93 crore to the public exchequer. The figure includes underpayment of licence fee and spectrum usage charge (SUC) of Rs 5,000 crore, plus penalty and interest of around Rs 7,500 crore. The companies have since rejected the accusation.
Ravi Shankar Prasad, who until Tuesday was the minister of telecommunications, highlighted the fact that the UPA was in power during the period (2006-2010) in which the under-reporting of AGR is supposed to have taken place.
However, the crux of Congress's charge is this: instead of immediately acting on these revelations reflecting serious loss to public exchequer, the Modi government opted for an alternate reevaluation of these figures "through chartered accountants empanelled with the telecom ministry."
This, alleged the Congress, is a clear attempt by Modi, especially, "to inordinately delay the process of recovery for years together, if not to write it off entirely." Calling the telecom ministry’s decision to conduct a re-evaluation of the CAG’s findings "a breach of Article 266 of the Constitution," Congress said: "if loss of exchequer is calculated on the same formula for the years 2010-11 to 2015-16, this figure would be more than Rs 45,000 crore."
Did the NDA government really "delay" the process of recovery? Was there an attempt to bury the findings?
"We received the CAG report in March this year and we wrote to the CAG requesting for detailed documents on the basis of which the CAG computed the under-reporting of revenues. This information came to us in mid-June and we are now working on issuing the notices. So where is the delay?" a department of telecommunications (DoT) official was quoted, as saying in Economic Times.
Since the CAG had named six operators, the DoT must also send notices for each quarter for each service area of these telcos which translates into 96 demand notices. "It will take some time at least to make these notices and we are well on track as per our schedule. So, it is completely wrong and misleading to say there has been any delay", the report quoted the official as saying.
In a press statement released on Thursday, the DoT clarified that it had "received the key documents scrutinized by the CAG in mid-June 2016. These are being vigorously examined and the process of issue of demands for the four financial years for six operators in 22 license service areas in consonance with license agreement is currently ongoing."
It said "demands raised from this exercise will be recovered with due interest and penalty as applicable under license agreements. There is therefore no loss of revenue to Government. The government is determined to recover every rupee of underpaid amount with interest and penalty from every defaulting company in the minimum possible time."
A report in Mint points out that six telecom operators, earlier in a joint statement, had contested the CAG findings. They said that the definition of AGR for the purpose of calculating licence fee is under litigation in various judicial forums, including TDSAT (Telecom Disputes Settlement and Appellate Tribunal), high courts and the Supreme Court.
This had prompted the government to initiate the 'special audit' for three years to FY11, with Prasad, the former telecom minister, calling it "a legacy issue of the previous government" that he was "trying to clean up".
Incidentally, DoT, as a licensor, possesses the power to conduct a special audit, though the government made it clear that it "has not reviewed the findings of the CAG report and is preparing to issue notices basis the amount flagged by CAG".
What Congress seems to have conveniently overlooked is that the definition of AGR, based on which losses were calculated by the CAG, is currently sub-judice and the Supreme Court is yet to decide on how to calculate it. The apex court is expected to take a decision this month and according to the government, once the issue is cleared, the DoT will raise the demand notices.
“As we cannot take any action, there is no urgency to raise the demand. Once the SC gives its verdict on AGR, we will raise the demand with interest and penalty. The basic point is: there is no loss to government,” a DoT official was quoted, as saying in Business Standard.
It seems weird that a charge of "burying under the carpet" was brought against the government on an issue which has already been taken up in two parliamentary accounts committee (PAC) meetings held so far. The government will give a further update in the next meeting scheduled for 13 July.
The Congress appears to have skipped the due diligence part before hurling the allegations, leaving itself open to taunts that the charges brought against the Centre are "baseless", "senseless", "devoid of facts", as the BJP countered on Friday. Its leader Srikant Sharma said "Congress should do homework before flying to conclusions and holding press conferences".