The Joint Parliamentary Committee has given a clean chit to Prime Minister Manmohan Singh on 2G spectrum allocation, saying he was “misled” by the then Telecom Minister A Raja whose assurances stood “belied”.
The draft report of the JPC also rubbishes the loss figure of Rs 1.76 lakh crore estimated by CAG, saying it was "ill-conceived".
The report, which was circulated among members on Thursday before its adoption on April 25, also accuses Raja of forging the press note of January 7, 2008, after it was seen by the then Solicitor General G E Vahanvati.
"The Committee wish to point out that the procedure" regarding the First-Come-First-Served criteria was a "misrepresentation of facts and in tactic deviation from the existing procedure," it says.
While giving sequence of events leading to allocation of 2G spectrum, the report says, "the Committee are inclined to conclude that the prime minister was misled about the procedure decided to be followed by the Department of Telecommunications in respect of issuance of UAS licences.
"Further, the assurance given by the Minister of Communications and Information Technology (Raja) in all his correspondence with the prime minister to maintain full transparency in following established rules and procedures of the department stood belied."
The draft report, which is expected to generate much heat in the next JPC meeting, suggests that there is nothing against Finance Minister P Chidambaram with regard to decisions taken by the telecom ministry on 2G allocation.
On the controversial press release issued just before the licences were allocated, the JPC report quotes the CBI to say that the January 7, 2008, press note was "forged by the minister of communications and Information Technology" (Raja) with later inclusion of words "press release appd (approved) as amended".
"The CBI has claimed to have forensic evidence to substantiate their finding in this regard," the report said.
On the government auditor's loss figure of Rs 1.76 lakh crore, the report said "the Committee are of the considered view that the very move for calculation of any loss on account of allocation of licences and spectrum is ill-conceived.
"It is imperative that the calculation of loss to the exchequer on account of allocation of licences and spectrum has to be viewed in the context of the overall policies laid down for the telecom sector from time to time...," the draft report said.
The 30-member JPC, set up in March 2011, noted that though there were a number of recommendations on spectrum pricing made by TRAI or committees set up by government as well as views expressed by the Finance Ministry and the PMO, "there was no policy decision taken by the government in favour of auctioning of 2G spectrum."
It said, "most of the time, TRAI, the department of telecommunications, the ministry of finance and the planning commission favoured maintaining of reasonable spectrum price so as to make available telecom services at affordable price and ensure level playing field among service providers using various technologies."
The JPC report recalled that while deciding on the number of letters of intent it was to be taken into account that only serious players may deposit the entry fee who could afford non-availability or delays in spectrum allocation and roll-out using wire-line technology only.
"While approving the aforesaid proposal, the minister of communications and information technology decided that LOI may be issued to the applicants received up to September 25, 2007. In the Committee's view, the decision taken to advance the cut-off date does not appear to be fair," the draft report said.
The report said it is needless to mention that while taking the decision to modify October 1, 2007 as the cut-off date, the Department of Telecommunications should have clearly calculated the spectrum availability and published the same so as to make the decision-making process "logical and transparent."
"Disquietingly, the decision was to advance the cut-off date also not immediately put out in the public domain through a press release as was previously done by the department when the initial cut-off date was pronounced as October 1, 2007.
"To the utter dissatisfaction of the committee, the decision taken on November 2, 2007, was notified only on January 10, 2008, when LOIs for new UASL were issued. This procedural infirmity has, no doubt, cast cascading shadow on the decision-making process of the administrative ministry, which is highly deplorable," the report said slamming Raja.
The draft report of the JPC said a note was put up by the department of telecommunications indicating the procedure to be adopted for grant of UAS licences.
It stated the pending applications of the UASL shall be processed as per the existing policy. As per the existing policy, the LOIs were to be granted based on date of application to satisfy the principle of FCFS.
Giving out sequence of events, the report said that on November 7, 2007, the telecom minister had approved the procedure to be adopted by the DoT for processing of pending applications for grant of UAS licences.
After the procedure was approved, draft LOI was submitted for vetting by the Internal Legal Advisor of the DOT who gave an opinion that the matter needs to be examined by the law ministry as this was earlier referred to it.
"However, the committee could not find from the records as to what happened to the suggestion of the Internal Legal Advisor," the report said castigating the telecom ministry.
Thereafter, the file was sent to Licensing Finance Branch of the DoT for the vetting of draft LOI.
The branch suggested the present occasion is unique in the sense that a large number of applications are being processed simultaneously and it would be appropriate for all concerned to know the likelihood of allotment of spectrum to them.
"...The Committee is concerned to point out that despite a significant observation made by Licensing Finance Branch, the availability of spectrum was never put out in the public domain till the issuance of LOIs on January 10, 2008," the report said.