The Communication and IT Minister, Mr Kapil Sibal, on Friday said there was zero loss to the Government as a result of giving 2G licences to new players in 2008, contradicting a report from the Comptroller and Auditor General, which had pegged the loss at Rs 1.76-lakh crore.

Terming the CAG report as erroneous, Mr Sibal said, “The logic underlying this estimate is completely flawed. Government policy is formulated with a view to maximising public welfare, and not merely to maximise Government revenues. The pricing of different natural resources is often done in a manner that meets this objective. CAG has done injustice to itself by suggesting that there is a presumptive loss.”

Mr Sibal said there was no loss to the Government, as the calculations done by the CAG had to be discounted for various factors, including time value of money and difference between 3G and 2G spectral efficiency.

The Minister claimed even the BJP-led Government had allowed telecom operators to migrate from a fixed entry fee regime to revenue share in 1999.

“If one calculates the loss due to various policy decisions by the NDA Government from 1999 onwards, the exchequer has lost out on Rs 1.43 lakh crore,” Mr Sibal said.

Wrong interpretation

Mr Sibal said the CAG has wrongly interpreted the communication between the Prime Minister and the then Telecom Minister, Mr A. Raja.

“The PM was informed that the Finance Minister and the DoT after considering all options, had come to an agreement that the 2G pricing should continue as before, which 3G Spectrum would be auctioned. The Prime Minister accepted this outcome regarding spectrum pricing,” he said.

Mr Sibal, however, admitted that the CAG's findings regarding procedural irregularities in the implementation of the first-come-first-served policy should be taken very seriously.

“Once the investigation by the CBI on criminal culpability is over and the report of the one-man panel on procedural issues is submitted, we will take strong action against whoever is found guilty,” he said.

Market watchers, however, bunked the Minister's claims. Mr B. K. Syngal, former Chairman, Videsh Sanchar Nigam Ltd, said, “The Government has failed to justify how it could give 2G licences in 2008 at 2001 price. The loss to national exchequer should be seen in the light of how the new licensees later on sold equity stake to foreign players at 6 times the money paid as entry fees.”

>tkt@thehindu.co.in