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No minutes of Chidambaram-Raja meetings on spectrum pricing: DEA

Posted by on July 8, 2011 0 Comment

There are no formal recorded minutes of meetings between jailed former telecom minister A Raja and then finance minister P Chidambaram relating to consultations that led the two ministries to report concurrence on spectrum pricing issues to Prime Minister Manmohan Singh .

In its presentation on Thursday to the Joint Parliamentary Committee on telecom matters, the department of economic affairs noted that meetings between Chidambaram and Raja took place around May 29, 2008 and an “agreed position” was reported to the PM.

Though this was well after the controversial 2G licences had been allotted, the finance and telecom consultations have been quoted by the government as evidence of convergence in government over pricing of spectrum that was allegedly undervalued.

The DEA, which is part of the finance ministry, found itself under intense scrutiny from Opposition members of the JPC with MPs asking how could there be no record of meetings that in effect placed a seal of approval on licences worth thousands of crores of rupees.

The department said the PM was informed of enhancement of usage charges by 1% of adjusted gross revenue (AGR) and pricing of spectrum based in indexing the base price and compounding prime lending rate for existing allotees beyond 6.2Mhz.

The DEA’s unusually frank account also said that an internal note put up to Chidambaram on January 9, 2008, recommending “both revision of entry fee fixed in 2003 as well as adoption of an auction methodology for determination of spectrum usage charges”.

A meeting of telecom commission slated for that day was put off till January 15 and the note finally sent by Chidambaram to the PM on the basis of the concept note said an auction based mechanism was recommended for “future allocation (beyond start up) with spectrum allocations have been made in the past to be treated as a closed chapter”.

Chidambaram, who now holds the home portfolio, has clarified in the context of the Public Accounts Committee report, that he had referred to payments in the past for additional spectrum and this may be treated as closed.

BJP members Yashwant Sinha , Jaswant Singh and Ravi Shankar Prasad joined by CPI’s Gurudas Dasgupta and BSP’s S C Mishra as well as the Trinamool representative Kalyan Banerjee questioned DEA closely and the officers said they will get back with more detail on decisions relating to the 2G scam.

Former finance minister Jaswant Singh also expressed surprise at the DEA pointing to a “non paper” about a April 21, 2008 communication from finance ministry to telecom department about an “in principle” decision on pricing of spectrum beyond 4.4Mhz. Since when had a diplomatic term like non-paper percolated to the finance ministry, he asked.

With regard to the 2007 decision to keep spectrum pricing out of the terms of reference of a group of ministers, the DEA said the matter was pursued with the telecom ministry for a while before being dropped. After June 15, 2007, the DEA did not take up the issue with either cabinet secretariat or the telecom department. Economic Times

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