Chidu could have got 2G licences cancelled, he didn’t: Pranab note

The Department of Telecom would have been compelled to cancel the 2G licences arbitrarily allotted by former minister A Raja in 2008 had the ministry of finance headed by P Chidambaram put its foot down on its original demand, which had stressed on auctioning the initial start-up spectrum of 4.4 megahertz each allotted to licensees. According to a CNN-IBN report, on 25 March 2011, Dr PGS Rao, Deputy Director in the Finance Ministry, had sent an office memorandum to Vini Mahajan, Joint Secretary in the Prime Minister’s Office, regarding allocation and pricing of 2G spectrum. The document cast doubts over the role of Chidambaram, who was the finance minister then, in Raja’s decision on the licences. The 11-page note, sent a month after Raja was jailed, was personally approved by Finance Minister Pranab Mukherjee. [caption id=“attachment_89236” align=“alignleft” width=“380” caption=“Chidambaram’s note assumes significance in the light of Janata Party President Subramanian Swamy’s petition in the Supreme Court. PTI”]  [/caption] Firstpost had reported earlier that both Chidambaram and Prime Minister Manmohan Singh had, willy-nilly, accepted Raja’s decision as a given and did not question his decision to keep entry fees and spectrum charges at 2001 levels. Chidambaram knew that the decision could run into legal problems yet he sought to treat it as “closed chapter” in his 15 January, 2008 letter to the prime minister. The note, accessed by RTI activist Vivek Garg, makes several important observations. It says Chidambaram’s ministry “implicitly agreed to imposition of same entry fee as that prevailing in 2001 for licences allotted up to 31 December, 2008.” This despite a 22 November, 2007 note by then finance secretary and present RBI Governor D Subbarao, that the 2001 mobile licence entry fee of Rs 1,600 crore had been applied and not the market price at that time. There was consensus between Raja and Chidambaram not to charge more for spectrum up to 4.4 megahertz. “…these were not charged (beyond the normal spectrum usage charges) since there was consensus, at the levels of the ministers concerned, that spectrum beyond the ‘start-up’ levels (beyond 4.4 megahertz) only should be charged,” the note says. “DoT could have invoked this clause (5.1 of the UAS licence) to cancel licence if the ministry of finance had stuck to the stand of auctioning the 4.4 megahertz spectrum,” the note sent to the PMO said. The note, according to the CNN-IBN report, says, on 15 January, 2008, five days after Raja’s ministry doled out 121 letters of intent (LOI) to companies, Chidambaram’s secret note informed Prime Minister Manmohan Singh that the spectrum allocation made in the past should be treated as a “closed chapter”. Fifteen days later on 30 January, 2008, Chidamabaram and Raja met and “it was noted by then finance minister that he was for now not seeking to revisit the current regimes for entry fee or revenue share.” The decision was taken despite Chidambaram’s own ministry objecting to Raja’s decision even a month after the LOIs were issued by telecom ministry.