| National Campaign Against Corruption Posted: 24 Nov 2010 06:34 AM PST Q. What is the 2G Spectrum Scam?
Ans. In 2008, the union government awarded pan India licenses and second generation telecom spectrum to 9 companies in 122 circles for offering mobile telephony services. These licenses were awarded in an arbitrary and non-transparent manner for a paltry sum of Rs.1658 crores, which was the price discovered in 2001, when the teledensity was very low. This abnormally low price was fixed without taking into account the remarkable increase in teledensity in the country, and the precious and the finite spectrum was allocated on a first-come, first-served basis without calling for competitive bids and without regard to experience in telecom sector. The government has also failed to lay down eligibility criteria for applicants and arbitrarily advanced the cut-off date for considering applications. The subsequent sale of spectrum so cornered by fly-by-night operators for many times the fee they paid had caused enormous loss running into tens of thousands of crores of rupees to the public exchequer.
Based on the subsequent auction of airwaves for third generation (3G) services, which fetched nearly Rs.63000 crores, and that for broadband access, which fetched over Rs.35700 crores, the notional loss to the exchequer due to under pricing of 2G spectrum was estimated by the CAG to be a whopping Rs.160,000 crores !!
Q. Can the 2G licenses be cancelled?
Ans. Yes. Under Section 23 and 24 of the Indian Contracts Act 1872, a contract becomes void if it is tainted with corruption. The Government can cancel the licenses and take back the 2G spectrum thus allotted, and return the license fee to the licensees after deducting fee for the period they used it. Revoking the allocation in public interest is necessary, fully
justified, and legally tenable.
Q. How do we recover the lost money?
Ans. The government can recover the lost money by fresh allocation of 2G spectrum through international competitive bidding after laying down transparent eligibility criteria in consultation with TRAI (Telecom Regulatory Authority of India). Also, the government can recover the excess profits obtained by the licensees, through imposition of a 'windfall profit tax'.
Q. What can be done to punish the guilty and prevent such scams from recurring in the future?
Ans. The government can immediately take up the following measures to prevent recurrence of such scams and frauds:
Enact a law under which any license/lease of natural resources by the Government shall become void if there is evidence of corruption/fraud/collusion/loss to the Government. The fear of losing licenses/leases obtained with illegal money will deter corporates from indulging in corruption.
Enact a Windfall Profits Tax law (on the lines of the UK law 1997), which will provide for stiff taxation of windfall profits earned by corporates in the exploitation of natural resources either because of monopoly or a change in the global economic environment. The companies that cornered the 2G spectrum licenses through questionable means and sold them within weeks for astronomical sums should be subjected to the proposed windfall profits tax. Such a law will also help tax the abnormal profits made in the mining and other sectors.
Enact a False Claims Act (on the lines of the U.S. law). If the exchequer incurs any loss because of fraud or misrepresentation or violation of the due process as determined by an independent, competent authority, the guilty will have to pay a civil penalty equivalent to three to five times the loss sustained. The U.S. Government has collected over $24 billion from corporates under this Act.
Enact a comprehensive anti-corruption law and create an Independent Anti-Corruption Commission (IACC). IACC set up in Hong Kong in 1974 reduced corruption within a few years. There is evidence that significant reduction in corruption alone will enhance economic growth rate by 1.5 to 2 percent per annum. Recent estimates indicate that nearly Rs.9.7 lakh crores of tax evaded money earned through corruption and dishonest business practices is stashed away outside India debt. Honesty is not merely a moral imperative; it is an economic necessity to accelerate and sustain high growth rates and eliminate poverty.
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| National Campaign Against Corruption - Time For Decisive Action Posted: 24 Nov 2010 03:21 AM PST Dear Friends,
The CAG's report on the 2G spectrum has proven beyond reasonable doubt that this is a scam of massive proportions involving corruption, arbitrariness, loss to the public exchequer, and abuse of authority at the highest levels of the government involving politicians, civil servants and even corporate houses. The CAG's estimate (which was based on the prices paid by bidders in the auction of 3G spectrum) indicate that the Indian exchequer was defrauded to the extent of a staggering 1,52,000 crores!
In the recent past, we have also witnessed the ugly and shameful corruption surrounding the Commonwealth Games and the Adarsh Housing Society scam in Mumbai. These are only a few scams that have seen the light of the day. Not a single day goes without some scam taking place somewhere in the country, and in a growing economy like India, in the absence of adequate safeguards, we can be certain of continued corruption.
Yet, the public debate seems to be focused on superficial measures such as removal of a minister/chief minister, and constituting a parliamentary committee for investigation. While they may be necessary measures in the short run, there is nothing on the anvil to either punish the guilty parties, take corrective measures to make good the loss to the exchequer, and prevent corruption from taking place in the future.
The need of the hour is tangible, decisive action for combating corruption. We took the initiative to create a common platform – "National Campaign against Corruption" to bring together eminent Indians from various walks of life, and like minded civil society organizations from across the country. We aim to channelize the public outrage constructively, and put pressure on the government and political parties to achieve tangible institutional changes for effectively combating corruption.
As part of this effort, from now and up to 9th December (International Anti-Corruption day), we encourage you to write to the Prime Minister (manmohan@sansad.nic.in, pmosb@nic.in) and demand concrete steps to punish the guilty parties and affect institutional changes as outlined below: Esteemed Prime Minister, In the light of the 2G spectrum scam, and evidence of rampant corruption in many other areas, we urge you to protect national interest by taking the following measures: - Cancel the 2G spectrum allocation.
- Get our money back.
- Punish the Corrupt.
Yours sincerely, X X X
We encourage you to spread this message and make your friends and associates write to the Prime Minister. He should hear from millions of Indians who are deeply concerned about mounting corruption in the country and want concrete, effective steps to cleanse our public life. We encourage you to visit http://www.killcorruption.org and sign an online petition at http://www.ipetitions.com/petition/killcorruption to the Prime Minister. Wherever possible, please encourage young people, college students, and enlightened citizens to send the same message by post cards addressed to the Prime Minister by name at: Dr. Manmohan Singh, R.No.148 B, South Block, New Delhi 110001. Also Re.1 money order can be sent to the Prime Minister with the same message. The Money Order will cost Rs.2.25 (Re.1 + Re.1 as MO fee and Rs.0.25 for the MO form), and has the added advantage of someone in PMO having to acknowledge it. Please ensure that your name, address and email or phone number is listed on your email or post card to lend authenticity to your message. We will keep you posted on our future plan of action and other developments from time to time. Warm regards Jayaprakash Narayan National Campaign against Corruption www.killcorruption.orgemail: killcorruption@hotmail.com  |
| A novel avalanche to hit PMO On 2-G spectrum scam (Telugu) Posted: 24 Nov 2010 01:19 AM PST |
| A novel avalanche to hit PMO On 2-G spectrum scam Posted: 24 Nov 2010 01:14 AM PST Demanding immediate cancellation of the 2-G spectrum allocations, recovery of the Himalayan loss the exchequer has suffered and institution of a strong anti corruption commission, students and youth will be flooding the Prime Minister's Office (PMO) with post cards, e-mails, faxes and one-rupee money orders beginning November 26.
Announcing the action plan at a media conference here today, Lok Satta Party President Dr. Jayaprakash Narayan called upon the youth and students to transcend party affiliations and raise their voice against corruption, which undermined their hopes for a better future.
Dr. JP said India has earned the dubious distinction of recording the biggest scam in world history in one Government wing in one year. Going by the Comptroller and Auditor General's report, the loss sustained by the exchequer could be as large as Rs. 1,76,000 crore. Had the Government earned such colossal revenue, it would have been sufficient to build 5 million classrooms or 20 million homes or add 8 million hospital beds.
Dr. JP regretted that all mainstream political parties focused on peripheral issues like appointment of a Joint Parliamentary Committee instead of pondering how the loss caused by collusive corruption could be recouped. They were guilty of obfuscating the issue by pitting tainted Telecommunications Minister Mr. A. Raja against scam-ridden Karnataka Chief Minister B. S. Yedyurappa, and indulging in mutual mud-slinging.
Dr. JP pointed out that the Indian exchequer had been robbed in broad daylight with politicians and bureaucrats resorting to dubious, opaque and illegal means to reward a select band of rapacious operators. By canceling the tainted licenses and disgorging the beneficiaries of their windfall gains, the Government should send a strong message that those who cheat the Government would not merely lose their social standing but also go bankrupt.
Dr. JP announced that Lok Satta, along with a number of highly credible individuals would be filing a petition in the Supreme Court on November 29 seeking cancellation of 2-G spectrum licenses. He released a poster titled National Camapgtin against Corruption as also a pamphlet on the 2-G spectrum scam.
Party General Secretary Katari Srinivasa Rao announced the campagin would be continued until December 9, World Anti Corruption Day. Dr. JP himself would send a money order to the Prime Minister listing the three demands on the scam on November 26. A public walk and a meeting would be organized at Visakhapatnam as a culmination.
Replying to questions, Dr. JP said that the Bihar verdict, as the earlier ones in Gujarat, Delhi, MP and Chattisgarh, demonstrates that people would vote back a party to power if it provides relatively better governance. He appealed to the State Government and the agitating employees to enter into a dialogue and sort out their problems. He condemned attacks on 'Sakshi' offices as unwarranted in a democracy.
Mr. D. V. V. S. Varma, Working President and Yuva Satta and Vidyarthi Satta leaders D. Ramu, P. Sivaji, Naveen Kumar Sarma and Mangala took part in the media meet.
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