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No question of preventing Audit from work on 2G: CAG

The Comptroller and Auditor General (CAG) has rejected allegations that it had discouraged lead auditor RP Singh in his work on the 2G spectrum report.

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The Comptroller and Auditor General (CAG) has rejected allegations that it had discouraged lead auditor RP Singh in his work on the 2G spectrum report and justified the quantum of presumptive loss of Rs1.76 lakh crore as based on certain market indicators of spectrum value.

Against the backdrop of reports that Singh, the then DG, Audit (Post and Telecommunications) had computed lower figures of loss and that his figure of Rs2,645 crore was overruled, the CAG office sent a detailed reply to Parliament's Public Accounts Committee (PAC), looking into the issue.

On the suggestion that Rai had discouraged Singh from seeking comments from DoT which he wanted to include in the final report, the CAG note said there was "no question" of preventing the DG, Audit from taking such a step.

"There is no question of CAG wanting to prevent DG (P and T) from obtaining comments from DoT. It is part of audit procedure to obtain response from the department and consider the same before finalising the report," it said.

The CAG said the draft report was issued to the DoT on July 19 by Singh and their response was received on July 27 and August 31, 2010.

On the reason behind the government auditor choosing to calculate presumptive loss at Rs1.76 lakh crore based on 3G auction prices, the CAG said audit tries to work out loss in all such cases where documentary evidences suggest a possible loss or wastage.

"Since certain indicators of market perception of the value that spectrum commanded in the later part of the decade were available, audit attempted to calculate the presumptive loss as per those indicators," the CAG said.

The auditor has also explained that the spectrum value of Rs1,658 crore in 2001 was arrived at in a biding process. The procedure followed in 2008 was first-come-first-serve which was an internal principle "followed by the DoT not approved by the Cabinet".

"In 2010 too the 3G prices were arrived at through a process of auction. Hence the decision to assess the quantum of loss in 2008 which was in deviation of the procedure followed in 2001 and 2010, was taken," the CAG reply said.

Reacting to suggestions made by some Congress members in meetings of PAC that Rai had overruled report of Singh, who had put the loss at Rs2,645 crore on the basis of inflation cost, CAG said the first draft reported prepared by the Delhi branch office of DG (Post and Telecommunications) on April 20, 2010 carried a figure of Rs48,374 crore as loss on account of allotment of spectrum to 122 licenses issued by the DoT.

The report was redrafted by RP Singh, who calculated "possible figures" of loss using three methods, and forwarded to CAG's office on May 31, 2010, CAG has informed PAC in a note.

The CAG said the figure of Rs65,725 crore was worked out on the basis of the offer made by S tel. But the office of the DG (P and T) felt the figure was "invalid" as S tel had withdrawn the offer in the High Court.

"Rs 1,39,229 crore based on 3G auction rates was worked out, of which loss of Rs36,729 crore calculated on the total additional 2G spectrum beyond 6.2MHz spectrum allocated to the operators was included in the report," the CAG said.

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