About 2g

India has been reeling under a series of corruption scandals, and one involving the licensing of telecom spectrum for 2G (second generation) services in 2008 has come to a head and may beat the rest in shock value, brazenness, arbitrariness and size. India's telecommunications ministry caused nearly US$40 billion in losses to the exchequer by selling the licenses at 2001 prices and by conducting the sale on a so-called first-come, first-served basis (as opposed to auctions) to benefit a few select bidders, according to an audit by India's Comptroller and Auditor General (CAG).
A. Raja, who headed the telecom ministry before being forced to resign on November 14, disregarded repeated warnings to use the auction mechanism and conduct the licensing with transparency and more equity, the report says. The whole exercise collected Rs. 12,386 crore (US$2.8 billion) from applicants. The CAG has revalued that spectrum according to several benchmarks, with its peak valuation at Rs. 176,645 crore (US$40 billion), using rates secured in the auctions of 3G spectrum in June 2010. "Even for a country that has a history of new scandals that pop up every time one thinks that things could not possibly get worse, they do," says Wharton management professor Jitendra Singh.
The 2G telecom controversy may well have ended like many others before it -- death by silence -- but for a confluence of events that included rising public anger over other corruption scandals. For more than a year since the spectrum allocations in early 2008, media reports had highlighted its flaws. Little came of those reports, but the CAG's November audit report emboldened Opposition parties to step up their drumbeat against Raja. Even after Raja quit, India's Supreme Court asked the prime minister's office to explain why it took 11 months to respond to a petition filed in November 2008 by Subramanian Swamy, president of the Janata Party, seeking permission to prosecute Raja. (The government later said it was "premature" to sue Raja, and asked Swamy to wait for the outcome of an ongoing investigation.) Swamy now plans to file a criminal suit against Raja. "The sheer scale of [the flawed spectrum allocations] and the sheer audacity of Mr. Raja permeated down to the whole society and a feeling of hopelessness also came that it won't be possible for society to survive if this goes unpunished," he notes. "The judiciary also became more cognizant that this is eating into our system."
The controversy grew murkier after Outlook magazine in November published secret phone recordings, claiming they exposed the role of Niira Radia, a high-profile corporate lobbyist, in using top journalists to help secure Raja's job as telecom minister. Radia's firm Vaishnavi Corp., which represents the Tata Group and Mukesh Ambani's Reliance Industries among others, issued a statement saying the tapes were unverified and denied any wrongdoing. Tata Group chairman Ratan Tata told television channel NDTV that his group has never used Radia to influence public policy, seek favors or make payments. He has also sought a court restraint on the publication of the transcripts of conversations between him and Radia. India's Enforcement Directorate has recently interrogated Radia on unspecified charges.