Author: PTI
Publication: Outlook
Date: November 17, 2011
URL: http://news.outlookindia.com/items.aspx?artid=741465
Comptroller and Auditor General (CAG) Vinod
Rai today revealed that his former colleague R P Singh had given a presumptive
loss of upto Rs 4.19 lakh crore on account of 2G spectrum allocation, contradicting
his claim that he was forced to accept a figure of Rs 1.76 lakh crore.
The CAG also rejected all charges against
him of having exceeded his Constitutional mandate, a point made by Prime Minister
Manmohan Singh against him, and maintained that an adversarial position was
inherent in his job.
There was also nothing wrong in the media
briefings by the auditors on the 2G report, Rai said recalling that such a
practice was being followed since 1988, which has been upheld by the Madras
High Court in 2004.
Appearing before the Joint Parliamentary
Committee probing the scam, he contradicted yesterday's claim by Singh, who
retired as Director General, Audit (Post and Telecommunications) and was the
lead auditor of the 2G audit report, that he was forced to sign the final
report that had pegged the maximum presumptive loss at Rs 1.76 lakh crore.
Explaining the process of audit, the CAG
maintained that the Branch Audit Office (BAO) report in the 2G case was changed
by Singh and the same process was carried on in the CAG office.
"If the CAG cannot vet, examine, revise
and decide on a recommendation of the DG, it also means that the DG cannot
vet, examine, revise and decide on the findings and recommendations of the
BAO," Rai said in a presentation to the JPC.
"...Should the figure of Rs 4.19 lakh
crore, worked on the basis of DGA (P&T)'s calculation, have been retained?"
Rai asked.
Sources said R P Singh had signed on papers
that gave a loss estimate ranging from Rs 2,645 crore to Rs 4.19 lakh crore.
"Different figures on loss estimates
ranging from Rs 2,645 crore to Rs 4.19 lakh crore were projected at different
stages of the audit process," JPC Chairman P C Chacko told reporters
after the meeting but did not give details as to who had prepared those estimates.
Maintaining that the final decision on the
final contents of the report was of the CAG, Rai told the JPC that the initial
report of the production sharing contract in the KG Basin had mentioned a
"huge loss" due to non-surrender of oil fields.
"This, however, was not approved by
the CAG in the final report. There was also a hypothesis that by restricting
production, government's share of profit petroleum would get restricted. As
this hypothesis could not be conclusively established through a sensitivity
analysis, it was not included in the report. Final call is always that of
the CAG," he said.
Similarly, Rai pointed out that certain strong
expressions in the draft report on Air India and a figure of Rs two lakh crore
loss in the S-band allocation in Devas-Antrix deal picked up from preliminary
findings were dropped.
Justifying the use of the term "presumptive",
Rai said it is part of Direct Tax Code and the Income Tax Code recognises
and uses terms including "presumptive income", presumptive tax".
"In our audit reports, more specifically
in our revenue audit reports, we have been calculating presumptive losses.
The terminology is thus not our creation," he said.
Explaining why the word "presumptive"
was used, Rai said the price of Rs 1,658 crore was arrived in a bidding process
in 2001 by market discovery. The sale of 3G in 2010 was by an auction -- market
discovery. Globally, spectrum has been auctioned.
Giving various calculations incorporated
in different draft reports, he said the Stage I report prepared by branch
office, Delhi, carried figures of Rs 48,000 crore and Rs 26,000 crore.
In the Stage II, this report was re-drafted
by the office of DG (P&T) and figures of Rs 2,645 crore, Rs 2,651 crore
and Rs 36,000 crore were incorporated. The covering letter of May 31, 2010
mentions figures of Rs 1,02,000 crore and Rs 65,000 crore, Rai said.
At Stage III, the draft report was further
scrutinised and after examination of records not available earlier, a range
of figures from Rs 58,000 crore to Rs 1.76 lakh crore emerged.
The top official auditor said while the Ministry
of Finance gave two parameters to calculate the value of spectrum, neither
was conclusively suggested.
"If so, how can the government itself
thereafter orchestrate a 'no loss' hypothesis?" he asked apparently referring
to Telecom Minister Kapil Sibal's claim of zero loss due to 2G spectrum allocations.
