Milind Deora article about 2G scam

On 21 December, the CBI special court delivered its verdict on the much-sensationalised 2G spectrum case, acquitting all of the accused. Arguably the most damning statement in the 1,552-page verdict was the assertion that the “scam” was an entirely fabricated one, with gross untruths packaged as facts. In the words of the special court, “a huge scam was seen by everyone where there was none. Some people created a scam by artfully arranging a few selected facts and exaggerating things beyond recognition to astronomical levels.”

I joined the government as Minister of State for Telecommunications in July 2011, right in the thick of the action as the 2G controversy unfolded. As I began my work in the ministry, I was very clear that I would study my predecessor’s policy from an objective and unbiased lens. He was neither a friend, nor a close associate – we weren’t even from the same party – so I had absolutely no vested interest in defending or unduly endorsing the decisions he had made in the ministry.
I was simply determined to uncover and understand the facts as they had presented themselves. In order to be able to objectively assess the situation for myself, I based my analysis on the merits and demerits of A Raja’s policy decisions. Shortly after I joined the ministry, I examined the situation and tried to ascertain whether it was, indeed, a wise decision to auction spectrum – a policy that we would do well to remember was inherited by UPA from Atal Bihari Vajpayee’s NDA – or whether it was an imprudent choice.

What became clear to me without a doubt was that a government’s highest priority cannot be revenue maximisation – in this case, it should have been expanding teledensity. Just as in the banking sector, priorities must be focused on financial inclusion and access to financial services, in telecommunications, the priority must be ensuring the widest possible net for access to mobile telephony, broadband and high-speed internet.

The whole notion that the highest priority for a government should be to earn revenue is fallacious and misleading.

While the government earns money from spectrum auctions, the money that telecom companies pay to the state is almost entirely borrowed from banks. If the government earns revenue from auctions, it must dig into other pockets to capitalise banks straddled with debt as a consequence of those very auctions.

The ramification of the 2G debacle is that the telecom sector is reeling with debt running up to Rs four lakh crore, owing partly to auctions and license cancellations. When telecom companies do well, 5-10 percent of their topline or CAGR goes to the government as part of a revenue share model. Conversely, when they perform poorly, not only do banks lose out, but teledensity takes a hit as the adverse financial consequences are passed on to consumers, and the government loses out on revenue share as well as direct and indirect taxes paid by telecom companies. Currently, India’s telecom sector is one of the worst performing ones in the world.

Most importantly, a healthy telecom sector, characterised by steadily increasing teledensity and connectivity, engenders productivity and employment, providing a boost to the health of the economy. The “notional” gain of earning revenue through auctions, therefore, pales in comparison to the very real, massive costs borne by the economy. The state of the telecom sector in the country and the impact of its poor performance on the economy speak for themselves.

In this six-year long debacle, even as a minister in the government, I chose to stay silent and withhold judgment on the politics of the controversy and the legality of the situation – until the verdict was announced. In light of the judgment, I have to agree with the court’s analysis that the CAG report provided the impetus and opportunity for all and sundry – including the BJP, Aam Aadmi Party, and India Against Corruption – to turn the situation into a grossly sensationalised public spectacle and fabricate a scam to the tune of ?1.76 lakh crore.

A shrill, toxic environment was created and the waters were muddied, which gave Opposition parties and political start-ups the opportunity to make a quick political buck by fishing in those troubled waters. I wish, for the country’s and the economy’s sake, that the concerned parties – media, political outfits, business rivals – had simply chosen to allow due process to be followed and the truth to come out through legal channels. Almost everyone jumped into the bandwagon to create this spectacle and fuel untruths, and now the court has found that the “scam” was manufactured. Not only did this falsely discredit the accused, it also hurt India’s competitiveness, economy and the credibility of the political system.

A personal takeaway for me from this situation, and one I would urge my colleagues and members of the Congress to pay heed to, is how very important it is to strategically and actively counter untruths in a timely manner. As the 2G case made evident, in the business of politics, “facts” are easy to conjure and manufacture, and public perceptions are hard to change. While being principled is indispensable, being silent is not – doing so might help one be vindicated in the long run, but in the short run, the untruths can cause irrevocable damage. The truth in most cases will ultimately prevail – our country’s robust judicial framework would see to that – but in the meantime, its absence can be pretty devastating for some.

Leave a Reply

Your email address will not be published. Required fields are marked *