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Crosstalk on Spectrum

Crosstalk on Spectrum

Author:
Publication: India Today
Date: August 22, 2011

In the box titled "Government Kept in the Loop", August 8, the correspondent makes three points under the sub-heading that refers to me:

Point No.1

He asks, why did Chidambaram keep quiet when the finance secretary objected to the pricing of spectrum? The answer is in point 4 where the correspondent says "Subba Rao wrote a letter firmly objecting to giving away spectrum at Rs 1,658 crore. This letter could not have been written without Chidambaram's approval. Then telecom secretary D.S. Mathur, on instructions from telecom minister A. Raja, refused to increase the price of 2G spectrum." It is obvious that finance secretary Subba Rao and I had objected to the pricing of entry fee at Rs 1,658 crore.

Point No.2

The correspondent, referring to the amendment to the GOM'S terms of reference (TOR) says, "Surely this was done with his knowledge". How did your correspondent reach this conclusion? The record will show that ministry of finance not only objected to the amendment but repeatedly insisted, in writing, that 'spectrum pricing' should be included in the TOR.

Point No.3

As regards point number 3, Subba Rao has stated on record that he did not receive a reply to the letter dated June 6, 2007.

P. Chidambaram, Union Home Minister

INDIA TODAY'S response to Point No.1

* The fact that no letter was written beyond Subba Rao's letter of November 22, 2007 (also admitted position of the Government in DOT'S affidavit in the Supreme Court dated November 11, 2010) points to the fact that the finance minister kept quiet on the issue. Writing a letter and then receiving a reply to which no response is given would be considered "keeping quiet". Moreover, the letter written by D.S. Mathur dated November 29. 2007 (D.O. No. 20165/2007 -AS-I) in reply to Subba Rao's letter dated November 22, 2007 (D.O. No. 10/09/FS/2007) clearly mentions that "the entry fee was finalised for VAS regime in 2003 based on the decision of the Cabinet. It was decided to keep the entry fee for the VAS license the same as the entry fee of the fourth cellular operator, which was based on a bidding process of 2001". The letter also mentions the fact that the telecom minister may make a decision with regard to calculation of entry fee.

However, if the finance minister (who acknowledges that he had oversight of the letter written to and from Subba Rao) had referred to the Cabinet decision of October 31, 2003, which stated: Section 2.1.2 (3)-"The Department of Telecom and the Ministry of Finance would discuss and finalise spectrum-pricing formula which will include incentive for efficient use of spectrum as well as disincentive for suboptimal usage", he and his finance secretary could have merely enforced the same Cabinet decision that was being cited for continuing with 2001 prices. The finance ministry could have easily stated that the said Cabinet decision requires both finance ministry and DOT to concur and since (by the finance minister's own admission) there was no concurrence, then clearly a fitting reply should have been sent to Mathur's letter dated November 29, 2007, which was not. This establishes that the finance minister decided not only to "keep quiet" but in fact ignore the terms of the very Cabinet decision which gave him and his ministry the right to jointly agree to spectrum pricing - a right that the finance minister waived by not replying to or pointing the DOT to Section 2.1.2(3) of the Cabinet decision.

* Quite apart from the fact that the finance minister could have enforced the Cabinet decision of October 2003 if he had merely replied to the DOT'S letter, the finance minister also has rights under the Government of India (Transaction of Business) Rules wherein:

i) Under Rule 7 of the Government of India (Transaction of Business) Rules, all cases specified in the second schedule to the said rules, which include cases involving financial implications on which the minister of finance desires a decision of the Cabinet and the cases in which a difference of opinion arises between two or more ministers and a Cabinet decision is desired, shall be brought before the Cabinet. So clearly, under Rule 7, the finance minister could have easily (since he admits that he disagreed on spectrum pricing and it had a revenue implication) desired that the matter be taken to the Cabinet. This was not done.
Therefore, the implication that he decided to "keep quiet".

ii) Rule 4 of the Government of India (Transaction of Business) Rules under Article 77(3) of the Constitution requires that "when a subject concerns more than one department, no decision be taken or order issued until all such departments have concurred and failing such concurrence, a decision thereon is taken by or under the authority of the Cabinet. As per the rule, unless the case is fully covered by powers to sanction expenditure or to appropriate or re-appropriate funds, conferred by any general or special powers made by the Ministry of Finance, no department shall, without previous concurrence of the Ministry of Finance, issue any orders which may, inter alia, involve any abandonment of revenue or otherwise have a financial bearing whether involving expenditure or not". It is clear from Rule 4 as well that the finance minister, who was dealing with the issue of spectrum pricing, which directly relates to "more than one department", finance ministry and Department of Telecom, and would have led to "abandonment of revenue", and has "financial bearing", the finance minister could have ensured that such decision went to the Cabinet. This did not happen. Therefore, it is appropriate to say that he kept quiet.

Supplementary rejoinder from Chidambaram

It is obvious that you are not aware of the action taken on the letter dated November 29, 2007. The record will speak for itself and it will show that the Ministry of Finance did not "keep quiet".

INDIA TODAY'S response to Point No.2

The report does not at any stage state that the finance ministry did not object to the amendment. The correspondent has merely stated that "surely this was done with his knowledge". This conclusion is reached from the following evidence:

i) In the TOR for the GOM on spectrum dated February 23, 2006, P. Chidambaram is mentioned as the finance minister who is copied on Page 2 of the said ToR after Pranab Mukherjee and Shivraj V. Patil (third on the list). In the same TOR, Section 3(e), a specific section relating to spectrum pricing, has been included. This evidence points to the fact that the finance minister knew at that stage that spectrum pricing was part of the TOR.

ii) In the amended TOR issued on re December 7, 2006, Section 3(e) is missing. In fact, there is no mention of spectrum pricing whatsoever. In this TOR as well, Chidambaram as finance minister is copied on Page 1 after Pranab Mukherjee, A. K. Antony and Shivraj V Patil (fourth on list). From the above correspondence, it is fair to assume that the finance minister would have had knowledge of the changes in the terms of reference.

Supplementary rejoinder from Chidambaram

Of course, we came to know of the amendment after it was made on December 7, 2006. That is why Ministry of Finance insisted, in writing, that the original TOR should be restored.

INDIA TODAY'S response to Point No.3

We would like to submit that there was a reply to Subba Rao's letter of June 6, 2007. A letter dated June 15, 2007 (D.O. No. L-14047/01/2006-NTG) was written by telecom secretary D.S. Mathur which started by acknowledging the letter of Subba Rao in specific terms as below:

"Kindly refer to your D.O. No. 3/11/2003Inf dated June 6, 2007 regarding terms of reference for the Group of Ministers on the vacation of spectrum and raising resources for the same..."

This letter dated June 15, 2007 is on record and is very much in reply to Subba Rao's letter dated June 6, 2007. Not only is it on record, it is now public information and is available on the DOT'S website.

Supplementary rejoinder from Chidambaram

The Department of Telecom's case is that a reply was sent to the letter dated June 6, 2007. Finance Secretary Subba Rao's testimony is that the reply was not received by the Ministry of Finance.

- E-mail your letter to: letters.editor@intoday.com


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