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India Mobile License Sale Lost Billions
BBC NEWS
November 16, 2010: There are about half a billion mobile phone subscribers in India, the world's fastest growing mobile market.
The 96-page Comptroller and Auditor General (CAG) report said that the sale of the licenses was undertaken "in an arbitrary, unfair and inequitable manner" by Mr Raja's department, which it said had favored a select group of companies. It has accused Former Communications And Information Technology Minister Andimuthu Raja of not only ignoring the advice of Prime Minister Manmohan Singh on the sale but also the advice of the ministries of finance, law and justice. It said that Mr. Raja's ministry "brushed aside" rules while handing out the licenses and that some operators did not qualify to bid for the contracts.
The CAG said the loss to the government could reach $39bn, but stressed that any figure was speculative because it was based on the sector's future growth. "We have worked out a presumptive loss. There is a loss that cannot be denied," deputy CAG Rekha Gupta told a news conference after the watchdog lodged its report with parliament. She said that 85 of the 122 licenses issued in 2008 were found to have been won by ineligible companies.
Mr Raja resigned over the weekend, denying any wrongdoing. The former communications and information technology minister said he wanted "to avoid embarrassment to the government" and allow parliament - which has been in uproar - to function normally. He is accused of issuing the licenses on a "first-come, first-served" basis instead of auctioning them. An auction of 3G bandwidth in May ended up reaping $15bn, twice the sum expected.
