Centre targets CAG on 2G spectrum figures, asks where is the 1, 76,000 cror

[Hellraiser007]

Centre targets CAG on 2G spectrum figures, asks where is the 1, 76,000 crore loss

New Delhi: The battle between the Congress-led United Progressive Government and the Comptroller and Auditor General over the presumptive loss figure of Rs 1.76 lakh crore in 2G spectrum allocation continues. The Centre on Thursday launched a fresh attack on the CAG and questions the 2G loss figures while demanding an overhaul of the auditor's method of calculations.

Information & Broadcasting Minister and Congress spokesperson Manish Tewari on Thursday lashed out at the CAG for the 1.76 lakh crore presumptive loss figure that caused a huge embarrassment to the government back and resulted in several high-profile arrests, including that of former telecom minister A Raja and several business leaders. "Mr CA & G where is the 1.76,000 crore loss?" asked Tewari in New Delhi.

The Centre also demanded a comprehensive overhaul of how the CAG calculates presumptive loss figures when a resource is not auctioned off, but sold in any other manner. The Supreme Court had ordered the auction after it had cancelled 122 2G licences of operators in February 2012.

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While attacking the CAG, Information and Broadcasting Minister Manish Tewari also demanded an overhaul of the auditor's method of calculations.
Centre targets CAG on 2G spectrum figures, asks where is the 1, 76,000 crore loss

Earlier, Congress General Secretary Digvijaya Singh, too, questioned the CAG's report and demanded that the figures should be re-evaluated. "The CAG should rethink on its report and loss shown by CAG as to how correct that data was," said Singh.

Meanwhile, Telecom Minister Kapil Sibal defended the poor response to the 2G spectrum auction, saying the government was not there to score points. "We are not here to score points. Our point always was that market dynamics should be allowed to play out. The moment you start dealing with market directly or indirectly then it will be bad," he said.

He also added that the government should only intervene when required and the purpose of the government is to ensure development and to ensure prosperity. “We are not here to feel vindicated," he said.

Poor response to the 2G telecom spectrum auction is likely to make it difficult for the government to keep in check fiscal deficit and meet the revised target of 5.3 per cent of the Gross Domestic Product (GDP) in 2012-13. As against the target of Rs 40,000 crore, the auction, which concluded on Wednesday, managed to fetch only Rs 9,407 crore.

As against the target of Rs 40,000 crore, the 2G spectrum auction, which concluded on Wednesday, would fetch only Rs 9,407 crore. This was much less than the reserve price of Rs 28,000 crore fixed by the Telecommunications Ministry.

It is also unlikely that the entire amount would be available in the current fiscal as the telecom companies would have the option to stagger payment over three years. In view of rising oil and food subsidy bill and subdued revenue collection, the government had increased the fiscal deficit target for 2012-13 to 5.3 per cent from 5.1 per cent estimated in the budget.

This too now seems difficult in the backdrop of tepid response to 2G spectrum auction and the disinvestment plans which have so far remained a non-starter. As regards disinvestment, although the government has proposed to raise Rs 30,000 crore from stake sale in the state-owned enterprises, not a single PSU has hit the market in the first seven months of 2012-13.

(With additional information from PTI)

Centre targets CAG on 2G spectrum figures, asks where is the 1, 76,000 crore loss- Politics News- IBNLive

 

[Rajaraja Chola]

It now seems really CAG method is flawed. !.76 lakh crores was based on presumption.
But opposition got hold of it for political advantages.
The embarassment is govt got less money now than what it got in 2008

 

[arp2041]

It now seems really CAG method is flawed. !.76 lakh crores was based on presumption.
But opposition got hold of it for political advantages.
The embarassment is govt got less money now than what it got in 2008

No, it's not that, CAG figures were completely fair by looking at the profits which the companies got by reselling the licenses, it's just that the conditions present in the 2g auction of 2008 are no longer present in 2012 (like decrease in investor confidence, decrease in GDP nos., also company's dilemma of a fair process & guarantee of no license cancellation this time, etc.) that has effected the auction, plus it was for the govt. to save the face by getting lower money in this auction since if we had got the money which the CAG cited than the CAG stand would have been vindicated while Govt. would had proved wrong - maybe some internal people at work to flop the 2g auction?? Can be True.

some figures:

Swan Telecom - Licenses bought in 2008 at $340 million, while selled 45% stake for $900 million, i.e. real market price = $ 2 billion.

Unitech - Paid $365 million for licenses, while selling the 60% stake at $1.36 billion, again market price for 100% = $ 2 billion.

This is just eg. of 2 companies, there were others also which did the same.

 

[Rajaraja Chola]

No, it's not that, CAG figures were completely fair by looking at the profits which the companies got by reselling the licenses, it's just that the conditions present in the 2g auction of 2008 are no longer present in 2012 (like decrease in investor confidence, decrease in GDP nos., also company's dilemma of a fair process & guarantee of no license cancellation this time, etc.) that has effected the auction, plus it was for the govt. to save the face by getting lower money in this auction since if we had got the money which the CAG cited than the CAG stand would have been vindicated while Govt. would had proved wrong - maybe some internal people at work to flop the 2g auction?? Can be True.

some figures:

Swan Telecom - Licenses bought in 2008 at $340 million, while selled 45% stake for $900 million, i.e. real market price = $ 2 billion.

Unitech - Paid $365 million for licenses, while selling the 60% stake at $1.36 billion, again market price for 100% = $ 2 billion.

This is just eg. of 2 companies, there were others also which did the same.

U r right dude. But we have to see market analysis too. I am no supporter of raja or congress but just talking in pure economic sense.
Have u noticed after 2008, the mobile call rates and 2G internet rates had shrunk so low, that made the US, WE the biggest gainer indirectly.
Prices became so low, and we were the biggest beneficiaries.
After 3 G auction prices of call rates and sms have skyrocketed. 1gb internet was made available for 1000 rs. (though its considerably less now).
Seriously from my personal experiences, rates have increased and am not able to talk more.
Sometimes govt have to sacrifice money benefits for general public.
Raja did corrupt, but i think auction is not the only process.

 

[arp2041]

U r right dude. But we have to see market analysis too. I am no supporter of raja or congress but just talking in pure economic sense.
Have u noticed after 2008, the mobile call rates and 2G internet rates had shrunk so low, that made the US, WE the biggest gainer indirectly.
Prices became so low, and we were the biggest beneficiaries.
After 3 G auction prices of call rates and sms have skyrocketed. 1gb internet was made available for 1000 rs. (though its considerably less now).
Seriously from my personal experiences, rates have increased and am not able to talk more.
Sometimes govt have to sacrifice money benefits for general public.
Raja did corrupt, but i think auction is not the only process.

mate, agree with u, yes the call rates became less, but was it really because the 2g was not auctioned?? I mean ultimately every company sold majority of it's spectrum share at market rates, that money went into there pockets, if the govt. had auctioned earlier according to market rates than again we were at benefit since that would had helped in overall development of India, & govt. has sufficient leverage over private players to keep the call rates in check, that wouldn't have affected the companies, just there profit margins would have reduced.

Also it's not just the question of auctioning, the thing is that the stated directives were also not followed, last dates of application were changed to favor certain companies, TRAI guidelines says that there should be no license given to companies that have no experience in telecom industries, while licenses were given to companies such as swan telecom which came from nowhere just before auctioning. Look at the coal scam, the coal blocks were never auctioned b'coz the govt. wanted to keep electricity prices in check & increase power generation, but when we check the reality than we get to know that majority of blocks didn't even started production & here electricity prices are increasing day by day.

So it's not the question of auctioning or not but to follow the set guidelines which are set by none other than GOI itself.

 

[Rajaraja Chola]

mate, agree with u, yes the call rates became less, but was it really because the 2g was not auctioned?? I mean ultimately every company sold majority of it's spectrum share at market rates, that money went into there pockets, if the govt. had auctioned earlier according to market rates than again we were at benefit since that would had helped in overall development of India, & govt. has sufficient leverage over private players to keep the call rates in check, that wouldn't have affected the companies, just there profit margins would have reduced.

Also it's not just the question of auctioning, the thing is that the stated directives were also not followed, last dates of application were changed to favor certain companies, TRAI guidelines says that there should be no license given to companies that have no experience in telecom industries, while licenses were given to companies such as swan telecom which came from nowhere just before auctioning. Look at the coal scam, the coal blocks were never auctioned b'coz the govt. wanted to keep electricity prices in check & increase power generation, but when we check the reality than we get to know that majority of blocks didn't even started production & here electricity prices are increasing day by day.

So it's not the question of auctioning or not but to follow the set guidelines which are set by none other than GOI itself.

Yes. Have to agree with u. But this CAG , calculated the preseptive loss based on 3G successfull auctions. Was this way right for a premier institution like CAG?
Even if govt had auctioned, i doubt we would have got 1.76 lakh crores.
Yes Raja had corrupted in allwing companies through bribaries, i never disagree with that. He was a corrupt.
Moreover its another body TRAI which keeps regulations, not the govt.
If u see regarding coal scam, the areas were never put into production, thus govt had suffered losses.
many were put into breaucratic delays such as Environmental clearance, defence clearance etc. Not to forget opposition support to local people.
Govt must cancel coal, give environmental clearance and put into production right away. We can save much needed money from imports and keep electricity prices in check.

 

[arp2041]

Yes. Have to agree with u. But this CAG , calculated the preseptive loss based on 3G successfull auctions. Was this way right for a premier institution like CAG?
Even if govt had auctioned, i doubt we would have got 1.76 lakh crores.
Yes Raja had corrupted in allwing companies through bribaries, i never disagree with that. He was a corrupt.
Moreover its another body TRAI which keeps regulations, not the govt.
If u see regarding coal scam, the areas were never put into production, thus govt had suffered losses.
many were put into breaucratic delays such as Environmental clearance, defence clearance etc. Not to forget opposition support to local people.
Govt must cancel coal, give environmental clearance and put into production right away. We can save much needed money from imports and keep electricity prices in check.

Fair enough, but u should understand that CAG is a human being & not God that he can predict what would have happened if this was done?? CAG reached to that figures by assessing what would had happened IF ideal conditions were made for 2g spectrum sale, no one can 100% guarantee that we would have got Rs. 1.76 lakh by auction, these figures are just the scale to measure the enormity of the 2g scam, i am not saying that we would have got exact figures what CAG has predicted, what i am saying is that there was a huge scam. Look at the 3g spectrum auction, we got more the Rs. 50k crore by that auction, hope u know that 2g would had fetched more profits for companies than 3g thus in 2008 if auction would have been done we would have certainly got more, even CBI (which is directly under GOI's control) acknowledged that the scam was there & gave a figure of Rs. 30k crore. Now we are questioning the CAG figures in 2012, when the 2g spectrum is not a good investment for companies anymore since we are in a time when we have 3G as well as 4G.

 

[arp2041]

BJP attacks government on 2G spectrum auction flop show

In a scathing attack on the government on the 2G spectrum auction issue, BJP today said low bidding has vindicated the CAG stand that not going for auctions in 2008 had led to a huge loss.

It said the wrong policies of UPA were to be blamed for low collections.

"This must be the first government of the world which is celebrating its defeat. The auction for 2G which did not yield the desired amount is failure of the UPA government. But instead of accepting its own follies it is blaming the CAG, CVC, the Supreme Court and everybody else," BJP spokesperson Prakash Javadekar said.

Rising to the defence of the CAG, BJP said the attack on him by the UPA ministers is part of the same conspiracy to clip its wings by making it a multi-member body.

"CAG had estimated losses for 2007 in his report. Mishandling of the economy by the UPA government in the last five years has deterred several investors... Our Indian investors are now investing abroad," Javadekar said.

BJP plans to keep this issue alive and will raise it in the forthcoming Parliament session to put the government on the mat.

"It is sad that this government is attacking all institutions and trying to make CAG look responsible for the low bidding. It is doing so because it is neck-deep in corruption," Javadekar said.

Javadekar said Telecom minister Kapil Sibal should clarify why the government did not go for auction in 2008.

"In five years you have destroyed the whole economic momentum.... To say that lower bidding shows their first come first serve policy is right is a flawed argument," he said.

BJP attacks government on 2G spectrum auction flop show - The Economic Times

 

[arp2041]

Govt, mobile firms nexus behind low bids in 2G auction: Sitaram Yechury

The CPI(M) on Friday countered the government's attack on CAG using the tepid response to 2G spectrum auction, saying it was due to saturation of demand for it and the availability of 3G spectrum in the market. The party also charged the government and the corporates with "collaboration" and having "vested interest" in keeping the 2G auction prices low.

Countering the government which blamed the CAG and the opposition's "sensationalism" about the huge notional loss to the telecom sector due to 2G spectrum allocation, senior CPI(M) leader Sitaram Yechury said "a lot of false propaganda" was being carried out about CAG's estimation of losses of Rs1.76 lakh crore due to 2G spectrum allocation in 2008.

Maintaining that the scenario in 2008 and the one prevailing now were completely different, he said the lack of response in the latest round of auction was firstly due to the "virtual saturation of demand" in mobile phone service market which had 300 million subscribers four years ago and now has 900 million.

The other major factor was that 3G spectrum, which was not in existence in 2008, is available now and 4G is also going to be in place soon, Yechury said. "Both the government and the corporates have vested interest in keeping the (2G spectrum) prices low. They want the auction of excess spectrum to be held in low prices. The lower the prices, the better it is for the corporates. It is a collaboration between the government and the corporates," he said.

The CPI(M) leader said the government could have got better prices had it waited for some more months as the market would expand "only when data accessibility (on mobiles) increased. Now mobiles are used more for voice facilities."

Yechury's comments came as Telecom Minister Kapil Sibal said the Empowered Group of Ministers, headed by Finance Minister P Chidambaram, will meet soon to decide on price and date for auction of spectrum in circles like Delhi and Mumbai.

Govt, mobile firms nexus behind low bids in 2G auction: Sitaram Yechury - Money - DNA

 

[AHAM BRIHMASMI]

It now seems really CAG method is flawed. !.76 lakh crores was based on presumption.
But opposition got hold of it for political advantages.
The embarassment is govt got less money now than what it got in 2008

No, the method of CAG is not flawed. 2g scam was for 122 circles. and this auction was for only 22 circles. and that too has earned more money than total 122 circles were auctioned.More ever, this auction was totally fixed by the companies and govt. to save their loss occurred by cancellation of licenses given by 2g raja. imagine if this auction would have been fair. the loss figured out by CAG is based upon facts and documented evidences that are so hard that they can not be suppressed by the whole govt. machinery in spite of their all out effort. that is why court has not granted bail to culprits for whole six to eight months.

 

[trinity]

BS,If the centre is so innocent then why are jokers like accused Raja and such ppl, keeping mum on the issue and why are certain key figures dying and disappearing if nothing wrong was committed

 

[Rajaraja Chola]

No, the method of CAG is not flawed. 2g scam was for 122 circles. and this auction was for only 22 circles. and that too has earned more money than total 122 circles were auctioned.More ever, this auction was totally fixed by the companies and govt. to save their loss occurred by cancellation of licenses given by 2g raja. imagine if this auction would have been fair. the loss figured out by CAG is based upon facts and documented evidences that are so hard that they can not be suppressed by the whole govt. machinery in spite of their all out effort. that is why court has not granted bail to culprits for whole six to eight months.

I feel the auction rate was fixed unnaturally high. As a operator u or me want to make a profit. But there was no profit for the companies now. Personally i feel, 2G loss should not have been calculated based on 3G auction rates. Infact after the 2G sales, there was a revolution in telecom sector, which made , people, the largest benefits.
But now 3G is there, 4G services will start soon, some countries have even started 5G services. Now the companies wont invest in 2G not again, when they are loss making and in debt cos of 3G.

 

[AHAM BRIHMASMI]

I feel the auction rate was fixed unnaturally high. As a operator u or me want to make a profit. But there was no profit for the companies now. Personally i feel, 2G loss should not have been calculated based on 3G auction rates. Infact after the 2G sales, there was a revolution in telecom sector, which made , people, the largest benefits.
But now 3G is there, 4G services will start soon, some countries have even started 5G services. Now the companies wont invest in 2G not again, when they are loss making and in debt cos of 3G.

The cag's estimate is not based on auction of 3g. it is based on documented evidences and proper accounting. for example a coy. gets a license for 50 million which had no infra, knowledge, and even building for office. and after 6 months sells it to a real telecom company for 500 million.it means that license was worth rs 500 million and that buyer company still earned profit on those cheap call rate which we say that they are because of govt's pro poor policy( by selling 2g cheap).and this type of cases were at least 40 on that list of 122 licenses.

 

[brahmin]

I think people should ask Congress this question , not congress asking CAG . Btw isnt CAG influenced by congress ? Thank god it didnt become Congress and Audit General just like CBI became Congress Bureau of Investigation .

 

[Rajaraja Chola]

The cag's estimate is not based on auction of 3g. it is based on documented evidences and proper accounting. for example a coy. gets a license for 50 million which had no infra, knowledge, and even building for office. and after 6 months sells it to a real telecom company for 500 million.it means that license was worth rs 500 million and that buyer company still earned profit on those cheap call rate which we say that they are because of govt's pro poor policy( by selling 2g cheap).and this type of cases were at least 40 on that list of 122 licenses.

Nope buddy. That 1.76 lakh crore figure was bought based 3G auctions. CBI said a fig of 30000 crore, which is a more possible figure.
Sensationalism have made this serious issue and as PC said days before "Indian telecom story is now not a story which we can talk proudly to the world".
Before that every country looked at success of Indian telecom. CAG doc became a gun for opposition, who opposes for the sake of opposition. This is what i hate. A opposition should be responsible. But they are too involving in cheap publicity and vote share.