Pranab Mukherjee’s 'secret' 2G note surfaces to bug Chidambaram

Did then Union finance minister P Chidambaram play a role in deciding prices for 2G spectrum allocation? Documents now accessed by publisher and RTI activist Vivek Garg show that Chidambaram may have played a role in the entire murky episode, which, according to the Comptroller and Auditor General of India, caused the exchequer a loss of Rs1.76 lakh crore.

These papers show that finance minister Pranab Mukherjee had questioned the role of the home minister stating that it was Chidambaram’s insistence that led to finalising the prices of 2G spectrum at a measly Rs1,600 crore on a first-come-first-serve basis. The papers were submitted by Janta Party leader Subramaniam Swamy in the Supreme Court on Wednesday.

The CBI on Tuesday in the Supreme Court argued against probing Chidambaram’s role in the 2G scam.

 In fact, the documents also indicate that Chidambaram could have overruled the then telecom minister A Raja in the matter. On March 25, 2011, Dr PGS Rao, deputy director in the finance ministry, sent an office memorandum to Vini Mahajan, joint secretary in the prime minister’s office, regarding allocation and pricing of 2G spectrum.

Mukherjee approved the note after personally inspecting the 11-page document.

The note states that the telecom ministry had sent a note to the finance ministry on November 29, 2007 recommending a “revision of the entry fee fixed in 2003 (for 2G spectrum) as well adoption of an auction methodology” for the valuable spectrum.

But the department of economic affairs under Chidambaram ignored this note and did not insist on its earlier stance that an auction can be held for the spectrum.

The note also reveals a meeting on the spectrum issue chaired by the prime minister with Chidambaram and Raja in attendance. Several other meetings took place but the one between Chidambaram and Raja on January 30, 2008, is the critical one.

The note categorically states that the loss could have been avoided if the ministry of finance had stuck to its original demand for auctioning the spectrum. It states that “the then finance minister… not seeking to revisit the current regimes for entry fee or revenue share.”

This means, Chidambaram was in complete agreement that the spectrum could be given away at a throwaway price and not be auctioned as had been suggested earlier. Instead, Chidambaram “sent a non-paper to the then minister of telecommunications (A Raja) on April 21, 2008.”  In short, the department of telecom (DoT) would have been forced to cancel the 2G licences doled out by Raja had the ministry of finance under Chidambaram stuck to its original demand for auctioning the initial ‘start-up spectrum’ of 4.4 megahertz each allotted to the 2008 licensees.

It says that the finance ministry “implicitly agreed to imposition of same entry fee as that prevailing in 2001 for licences allotted up to December 31, 2008.” The note goes on to say how there was consensus between Raja and Chidambaram not to charge more for spectrum up to 4.4 megahertz, which finally went to telecom operators like Swan and Uninor, who are currently in the dock.

The note also says “however, these were not charged (beyond the normal spectrum usage charges) since there was consensus, at the levels of the ministers concerned, that spectrum beyond the ‘start-up’ levels (beyond 4.4 megahertz) only should be charged.”

“DoT could have invoked this clause (5.1 of the UAS licence) for cancelling the licence if the Ministry of Finance had stuck to the stand of auctioning the 4.4 megahertz spectrum,” the note sent to the PMO says.