2G spectrum scam

Jan 16 • General • 1348 Views • 6 Comments on 2G spectrum scam

The 2G spectrum scam involved politicians and government officials in India illegally undercharging mobile telephony companies for frequency allocation licenses, which they would then use to create 2G subscriptions for cell phones. The shortfall between the money collected and the money that the law mandated to be collected is estimated to be 176,645 crore (US$32.15 billion), as valued by the Comptroller and Auditor General of India based on 3G and BWA spectrum auction prices in 2010. However, the exact loss is disputed. In a chargesheet filed on 2 April 2011 by the investigating agency, Central Bureau of Investigation (CBI), the loss was pegged at 30,984.55 crore (US$5.64 billion) whereas on 19 August 2011 in a reply to CBI, Telecom Regulatory Authority of India (TRAI) said that the government gained over ₹3,000 crore (US$546 million) by giving 2G spectrum.[2] Similarly Kapil Sibal, the Minister of Communications & IT, claimed in 2011, during a press conference, that “zero loss” was caused by distributing 2G licenses on first-come-first-served basis.
All the speculations of profit, loss and no-loss were put to rest on 2 February 2012 when the Supreme Court of India delivered judgement on a public interest litigation (PIL) which was directly related to the 2G spectrum scam. The Supreme Court declared allotment of spectrum as “unconstitutional and arbitrary” and quashed all the 122 licenses issued in 2008 during tenure of A. Raja (then minister for communications & IT) the main official accused in the 2G scam case.[4] The court further said that A. Raja “wanted to favour some companies at the cost of the public exchequer” and “virtually gifted away important national asset.”[5] The “zero loss theory” was further demolished[6] on 3 August 2012 when as per the directions of the Supreme Court, Govt of India revised the base price for 5 MHz 2G spectrum auction to 14,000 crore (US$2.55 billion), which roughly gives the value of spectrum to be around 2,800 crore (US$509.6 million) per MHz that is close to the CAG’s estimate of 3,350 crore (US$609.7 million) per MHz.

The original plan for awarding licences was to follow a first-come-first-served policy to applicants. A. Raja manipulated the rules so that the first-come-first-served policy would kick in — not on the basis of who applied first for a license but who complied with the conditions. On 10 January 2008, companies were given just a few hours to provide their Letters of Intent and cheques. Those allegedly tipped off by Raja were waiting with their cheques and other documents. Some of their executives were sent to jail along with the minister.
In 2011, Time magazine listed the scam at number two on their “Top 10 Abuses of Power” list (just behind the Watergate scandal)

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6 Responses to 2G spectrum scam

  1. Ritika says:

    It was vey unfortunate & the amount that was laundered was shockingly VERY high!

  2. Pragya Saxena says:

    The scam took place due to auctioning of licenses in a fraud way to telecom companies..The accused Mr . A.raja was released and the auctioning of licenses was not a single person decision ,there are other people also involved who didn’t came so much in limelight and earned profits…

  3. Saurabh Singh says:

    I think some body started business behind this..they follow rule”First Come First Serve” which is totally illegal..and all who involve in this should be punished so that this type of wrong activity will not be repeated in future..

  4. Siddhant Tripathi says:

    The motive behind the whole scam was sole profit earning in form of high monetary bills and escape out untouched.. that’s what has happened.
    The accused; Mr. A. Raja was released as if such a huge amount under scam was like the change we offer to the waiters.
    Not one but all need to be blamed, because the bidding rates and auction was not a single’s decision.

  5. Ankita Prajapati says:

    In tax case, supreme court judgement is correct. That’s why govt has to make change to the law. Making it retrospective from 1962 is a problem created by Govt, not SC. Even in 2G, the licenses were obtained by fraud. And so have to be cancelled. The country will suffer even more if licenses obtained by fraud are allowed. ..

  6. Chitranshi Dhaneshwar says:

    Scam is never because of one person.There are many more who are involved in it.All should be equally punished.

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