2G scam: RBI governor’s letter shows how Raja ignored objections

The Central Bureau of Investigation’s (CBI) probe into the 2G scandal has revealed that former telecom minister A Raja and his associates had blatantly ignored serious objections about spectrum pricing raised by the ministry of finance’s department of economic affairs.

In his statement to the CBI, the RBI governor, D Subba Rao, who was then the finance secretary, has said he had raised objections to the department of telecom’s (DoT) decisions on 2G spectrum allocation.

On November 22, 2007, Rao had written to the DoT, stating, “The purpose of this letter is to confirm if proper procedure has been followed with regard to financial diligence. In particular, it is not clear how the rate of Rs1,600 crore, determined as far back as in 2001, has been applied for a license given in 2007 without any indexation, let alone current valuation. Moreover, in view of the financial implications, the ministry of finance should have been consulted in the matter before you had finalised the decision.”

The letter further said, “I request you to kindly review the matter and revert to us as early as possible with responses to the above issue. Meanwhile, all further action to implement the above licenses may please be stayed.”

Rao further said that a full telecom commission meeting was called on December 7, 2007. “Pricing of spectrum was not an agenda item for this meeting. Later, a meeting of the telecom commission was also scheduled for January 9, 2008, wherein pricing of spectrum was an agenda item. However, this meeting was rescheduled by the DoT to January 15, 2008,” Rao has told CBI. However, before the meeting could take place, DoT issued a letter of intent to telecom operators.