Former Cabinet Secretary Chandrashekhar deposes before JPC

The former Cabinet Secretary, K.M. Chandrashekhar’s shocking revelation on Thursday to the Joint Parliamentary Committee (JPC) investigating the 2G scam that Prime Minister Manmohan Singh had ignored his recommendation that an entry fee of Rs. 36,000 crore be charged for spectrum, has brought the ghost of the 2G scam back to the Prime Minister’s doorstep.

Mr. Chandrashekhar’s disclosure that he had submitted a note recommending a huge upward revision in the existing price of Rs. 1,651 crore for pan-India spectrum that had been discovered at 2001 rates, was in response to CPI leader Gurudas Dasgupta’s persistent questioning about the failure of the Cabinet Secretariat to act on a matter which had such huge financial implications for the country. Mr. Dasgupta’s relentless and well-researched questioning of witnesses has yielded unexpected dividends.

5 weeks before 2G scam

According to Mr. Chandrashekhar, the note was submitted on December 4, 2007. More importantly, it was not written suo motu, but submitted in response to a specific enquiry made by the Prime Minister regarding the financial implications of the allocation of scarce 2G spectrum at the 2001 price. Mr. Chandrashekhar explained that his recommendation for a staggering increase in spectrum price was based among other things, on the size of the market, the improvement in teledensity and the fact that demand had exceeded supply which was reflected through a long queue of 575 applicants for the licence. However, Dr. Singh never responded to his note.

The timing of this note reveals that had the Prime Minister acted upon Mr. Chandrashekhar’s advice, the government could have easily prevented the scam, since this note was dated 5 weeks before the scam took place on January 10, 2008.

PM’s silence

Dr. Singh’s silence on the matter is particularly inexplicable considering that Mr. Chandrashekhar’s note was consistent with his own letter of November 2, 2007 to ex-Telecom Minister A. Raja, seeking either auctions — where legally possible — or an increase in the entry fee. Mr. Raja had replied to Dr. Singh’s letter on the same day, refusing to either auction the spectrum or enhance the entry fee.

Subsequently, the then Finance Secretary Dr. Subbarao wrote to the Department of Telecom on November 22, 2007, again questioning the allocation of spectrum at 2001 rates, and directing a stay on all future allocation. The then DoT Secretary D.S. Mathur replied to this letter on November 29, 2007 arguing against any such action.

The timing of the letter is particularly significant since it was written after all correspondence between the Prime Minister and Mr. Raja and between the Finance and DoT Secretaries had been exhausted.

Note never revealed

JPC members point out that it is very worrisome that this note has been kept under wraps by everyone concerned, including the CBI, which recently provided a detailed deposition to the same JPC without so much as a whisper about such a document. Such concealment cannot be justified after so many developments have taken place — that it is now nearly four-and-half years after the scam broke out; that FIRs have been registered against several companies and officers of the government, including a former Union Minister; that multiple cases have been filed in a High Court and a PIL in the Supreme Court; that the Supreme Court has issued an order cancelling 122 licences on February 2, 2012; and then came over 100 statements, press releases, TV interviews, depositions in the JPC and even statements in Parliament.

Dr. Singh himself held a full press conference on the 2G scam on February 16, 2011, followed by a statement in Parliament on February 24, 2011. The Prime Minister explained that he did not object to Mr. Raja’s insistence on spectrum allocation at a 2001 price because of the agreement between the Ministries of Finance and Telecom as per the Cabinet decision of 2003, but did not reveal the existence of this critical note from the country’s seniormost bureaucrat.

‘PM failed in his duty’

“This is concrete proof that the PM failed in his duty to raise the entry fee for spectrum by ignoring market conditions as well as a clamour for price revision by several members of Parliament, industrialists, media and top bureaucrats,” Mr. Dasgupta told The Hindu.

According to BJP leader and JPC member Yashwant Sinha, “The fact that the government is using concealment of critical information and misuse of the JPC Chairman’s office to scuttle the 2G probe is a very serious matter.”

Senior BJP leader Arun Jaitley told The Hindu: “The PMO must respond to charges of deliberate concealment of critical evidence since concealment is construed to be a part of criminal intent.”

Chacko defends PM

However, JPC Chairman and Congress MP P.C. Chacko, rather than briefing the media on the JPC proceedings, mounted a detailed defence of the Prime Minister. “The Cabinet Secretary had reported at that point of time — when various aspects were being considered by the PMO, DoT and the Finance Ministry — that if 2001 prices are revised then what will be the implications … It wasn’t the PM’s responsibility to revise the entry fee or spectrum price … He has to refer it to concerned Minister. [The] Telecom Minister has to go through the TRAI recommendation which had clearly said that prices needn’t be revised,” he told a TV channel.

All six BJP members of the JPC and Mr. Dasgupta have already walked out of the JPC to protest Mr. Chacko’s attempts to sabotage any meaningful investigation by steadfastly refusing to entertain demands to call Finance Minister P. Chidambaram and Dr. Singh as witnesses. Mr. Chacko’s attempt to now publicly protect the Prime Minister is bound to deepen this divide, which is expected to reflect in Parliament next month.