CAG. The 2G scam. The Lokpal fracas. Fresh controversies each day. Drift in government. Chief UPA trouble-shooter Kapil Sibal puts himself on the line and tackles tough questions on a tough year from Ashish Khetan and Shoma Chaudhury. In doing so, he tries to cut through the surround sound and make some positions clear
Kapil Sibal, 63, has been the UPA government’s chief storm shelter in a year hit by serious political twisters. He took over the horribly snarled and scam ridden telecom ministry barely days after A Raja was forced to quit amidst a massive media blitzkrieg. With it, he inherited a seething middle-class, warring corporates, a battery of saber-toothed civil activists, an Opposition unified in assault and a hyper vigilant apex court. It’s a job many political veterans more weathered than him would have been happy to duck.
Barely a few months after this, Sibal was also picked to front the government in the highly emotive and shrill Jan Lokpal campaign unleashed by Team Anna. Sibal, who was both spokesperson and member of the Lokpal Joint Drafting Committee, had to pick his way, almost on a daily basis, through a skyline of different hurricanes. Press briefings, television appearances, negotiations with men as stubborn as they were righteous and the search for safe ground to stand on between Constitutional positions and raging public opinion. Through all this time, Sibal has also additionally held the gargantuan — and equally disordered and complex — education and human resource development ministry.
Politically, all of this is a serious coming of age for the suave lawyer who had only held the relatively low-profile science and technology ministry in the previous UPA government. But the curve has not all been easy going.
Sibal, who was widely considered a clean and strong politician, liked immensely by both media and middle class, has taken some big hits in the popularity index. Barely a month into taking over as telecom minister, he held a press conference where he asserted that there had been “zero loss” to the exchequer due to the telecom policy. He may have had reason on his side, but it wasn’t either astute timing or choice of words.
In the Lokpal face-offs too, the chemistry didn’t quite click. Team Anna was a complex mix of unassailable cause, good intention and maddeningly obdurate positions: Sibal’s impatience with this spilled through the cracks pretty often. Midway into the campaign, the fix-the-nation battle began to look suspiciously like a Bhushan-Sibal joust. The spate of fasts and arrests that followed and the spiralling bad press didn’t help any.
2011 has been a cripplingly tough year for the UPA government. Its goodwill, at least among the chattering class, has been eroded; Parliament has repeatedly been stalled; the government has seemed unable to build bridges; seize the discourse or appear captain of their own ship. Both media, Opposition and Team Anna have seemed two steps ahead at each juncture. With a prime minister mortally averse to facing the nation or taking a stand, and party president Sonia Gandhi — the real power centre — loath to publicly occupy space that belongs to the PM, it’s been left to Sibal, Home Minister Chidambaram and Finance Minister Pranab Mukherjee to articulate the government’s dipping voice. With Mukherjee and Chidambaram also reportedly locked in a bitter internecine power struggle, in many ways, it’s been Sibal who’s been pushed most into the eye of the storm.
To give him his due, he’s stood gamely in the wind. India has never felt more fractious, frenetic and lacking in a minimal consensus vision. Media, civil society, politics, corporations, transparency, judiciary — the very nature of democracy itself — is up for argument.
As fresh controversies continue to hit the government, here, in a long and impassioned interview held in the anteroom of his house in Teen Murti Marg, Delhi, Sibal takes on tough questions on a tough year and presents his government’s rationale on many complex decisions and issues. “Ultimately politics is about sincerity,” he says, “it’s not about defrauding or just managing things.”
That seems a good place to begin.
Excerpts From The Interview
A lot has already been said about the telecom mess. Let’s talk about the clean-up. What are you trying to achieve through the new National Telecom Policy?
The policy at the moment is in a draft stage, which means we have decided within the department what the policy should be. We will now put it in the public domain for people to make their points. We will take that into consideration, then go to the Telecom Commission and finalise it.
But what are the key areas that you are trying to address?
Well, the legacy of the past has been that, at this point, we have around12-13 players in each circle. This is not a healthy trend for several simple reasons. For one, if there are too many players, spectrum can’t be used efficiently. Two, the tariffs have come down far too low, which is very good for the consumer, but ultimately if companies don’t make a reasonable profit, there would be no further investment in the sector. So to ensure efficiency, equity to the consumer and reasonable profit to the operator, we need to consolidate the market. We are therefore putting in place a merger and acquisition policy, and hopefully an exit policy as well, to weed out the inefficient players. We also want to ensure that operators get maximum spectrum up to a certain limit, to cater to efficiency. We are also trying to ensure that the market share is such that no one player dominates the market.
This might sound good on paper, but how will you achieve it? There is hardly any spectrum left to be allocated and what lies ahead are years of litigation with the existing licencees.
I don’t agree. There is enough spectrum. We are not talking about all the 2G licencees, because those matters are still in the courts. We are only talking about people who are operating at the moment. And there is nothing to prevent them from merging or acquiring. If these 13 players are reduced to a minimum of six, then you can imagine that spectrum will actually be opened up.
But how will you reduce the number of players?
As I said, through merger and acquisitions. See, there are two or three possible ways ahead. First, all the licences get cancelled, so the spectrum becomes free. Second, if they don’t get cancelled, then they can merge and acquire. Where is the problem? Either way there is no problem. The litigation will not come in the way.
You have identified some key areas you are trying to address — consolidating the market through merger and acquisitions and exit options. But the biggest issue the industry is facing right now is the 120-odd licences that were given out by A Raja. Most of them are facing CBI trial. They are also facing serious problems in securing finance from the market. No bank or big international player is ready to touch these companies. So, unless this old mess is sorted out, no NTP can be effective.
No, no. I don’t agree with you. As I said, this is a separate issue. It’s true there’s been a drop in the fortunes of the telecom operators. The nature of today’s environment is such. One, there is global recession. Two, telecom operators, as you rightly said, are not getting finance from the banks. Three, the 122 licencees are in serious trouble because the matter is pending in court. All those are realities. But you are talking the short-term. In the long term, all this will be resolved and the market will definitely be buoyant again. Remember, the depth of the market is huge in India. We have touched about 800 million people with mobile phones, there’s another 400 million to go. And we are only talking about voice functions now. There are also the uncharted possibilities of content delivery. When the fiber optic lines are laid down and broadband wireless is available, you can imagine the possibilities in the market then. The bank of content that can flow to the consumer, in terms of education, health and financial inclusion is tremendous. Despite all you say, companies like Nokia and Sony Ericsson are increasing their investments in India. Nokia today has the largest manufacturing entity anywhere in the world here in India. They are longterm players. So I don’t think you should be worried on this count.
‘In 2001, three million people had telephone access. Today it’s almost 800 million. So, let’s be clear; I don’t think the policy as such is a failure’
By your own argument, 13-14 players in one circle is not feasible. Even globally, in 2007, the norm was 3-4 players in one area. Now that you are pushing for consolidation, will you accept the earlier policy was flawed?
Let’s get clear on this. What are the tariffs like today? They are the lowest anywhere in the world. So if you are talking about teledensity, the policy has succeeded. The lower tariffs allowed access to the most ordinary consumer. A maid in your house can call her family in West Bengal; a worker in Maharashtra can call his family on a daily basis in Bihar. Three million people in 2001 had access. Today it’s almost 800 million. So, let’s be clear; I don’t think the policy as such is a failure. Revenue maximisation was never the intent.
I also want you to understand, so much of the discussion today is in hindsight. Back then, we didn’t know how many players would come. It is only when the process went forward that we realised that there were 12-13 players and that maybe too many. If at the time we would have set a ceiling of not more than 4-5 players, you people would have asked, why are you allowing a monopoly?
But out of the 122 new licencees, 74 have not even rolled out their services. You have issued show cause notices to them.
You are mistaken. Many of them have rolled out and are operating even today. We issued show cause notices because many licencees who have rolled out now may not have rolled out on time as stipulated by their contracts.
In the high-pitched 2G scam debate, two issues have got confused. There is a big difference between actual corruption and disagreements over policy — whether within government or in the public domain. We accept that. So let’s set aside Raja’s wrongdoing for the moment and focus on the policy. It’s clear from official documents that at different stages many Cabinet colleagues and bureaucrats in UPA 1 had raised flags about low spectrum pricing. The question people are asking is why did all the naysayers in government finally concede? What was the rationale? Were you just trying to pamper corporates, create a conducive “investment climate” and ensure growth at any cost?
I don’t think your analysis is quite accurate. See any policy framework entails a debate. For example, take the Land Acquisition Act. A statute has been presented by the rural affairs ministry. There are several points of view on it within the government. Five years from now, if you start digging out notes exchanged within the ministry or between ministries and start judging what happened based on difference of opinions, you can create another controversy over something that is actually just a decision-making process. One ministry says something, another says something else and then a decision is taken. Once a decision is taken, everybody follows.
Let’s be clear on this. The policy was clear: first-come, first-served was good for the country. Now, whether someone manipulated that policy to favour A, B or C is nothing to do with the policy, it is to do with the implementation. And both the CBI and the courts are looking into that aspect of it.
There is wide public perception that the low pricing allowed too many non-serious players to come in. Once they got the precious spectrum, they diluted their shares and earned windfall profits from foreign investors. On the other hand, with the 3G auction, players had to come in at a higher price, so only the big, serious players came in, and because their investment is so high, they have been in a rush to roll out and start getting whatever revenues they can. In many ways, this has been more efficient than the 2G allocation. What’s your response to that?
First, let’s address the question of dilution of equity. That’s normal business practice. Even under the Mines and Minerals Regulation and Development Act, first-come first-serve is a statutory policy. Whoever applies first gets a mining licence. A company that wins the minerals doesn’t necessarily have the technology; a person who has technology doesn’t necessarily go out and win the mineral.
The point is, if serious players come in at a higher price, the money would go to the exchequer. In this arrangement, the start-up player earned huge profits. So it became not just profit-making but profiteering.
No, no, why do you say that? The investment goes to the company, not anybody’s pocket. The value of the company increases. This has happened in the media too. With foreign investment dilutions, the value of domestic shareholders of the company go up. Should they be sent to jail for that? Take any business in India, you will find the same thing.
Also, why is everyone only talking about the revenues the government might have got? Why aren’t you counting the revenue the government did get because of the fact that the consumer base went from 3 million to 800 million, because the breadth and depth of the market determines the revenue sharing.
Guess the issue is, if seven good players had come in, the teledensity would have happened anyway.
That’s a matter of speculation. It may have happened, but the tariff may have been Rs 5. I’m not an expert. In hindsight, as a journalist, you can say what you like. But you must accept the facts. The government got a lot of revenue because of the depth of the market, people were benefited because of low tariffs, there was greater competition in the market, and the other very important aspect I wish to emphasise, is that we got a lot of investment in the telecom sector.
‘Politics is about sincerity. I can assure you that there are many ministers in this government who work with 100 percent sincerity and it will pay at the end’
Let’s focus on specific controversies. Your press conference of 7 January — you were one month old in the ministry, the CBI investigations were still on; it was yet to file the chargesheet. Yet, you said there had been “zero loss” from the 2G spectrum allocation. In hindsight, do you regret that statement as inappropriate?
No, no. First, let’s be clear, why did we go to the press? We went because the CAG report was leaked before it reached Parliament or we even got a copy of it. The only way for us to respond was to have it placed in Parliament. Before that could happen, the minister had to resign. I took over. When we tried to discuss this issue in Parliament and place our point of view, the Opposition didn’t allow Parliament to function. Now the government’s view had to be presented — if not in Parliament, then in public. This was the rationale for me to go to the press. So to say it was inappropriate is unfair.
Second, what did I say at the conference? I said, according to the ministry, the CAG’s calculations are not entirely fair or accurate. That position has been proved right now as even the CBI has not accepted the CAG’s calculation of Rs 1.76 lakh crore loss.
Third, I said, the question of loss does not arise because there was a policy decision of first-come first-serve and no auction. When you say as a policy that you are not going to auction then you can’t calculate the loss on the basis of auction. What’s wrong with that statement? It’s logical, isn’t it?
Not just the CBI, many people are slowly beginning to accept that the Rs 1.76 lakh crore figure was misplaced, but the media took the CAG’s assessment as gospel truth at that time and we were pilloried for it.
Also, remember, the first statement I made was that we were going by the 10th Plan document, which said the country’s telecom policy framework needed to be based on teledensity rather than revenue maximisation as the prime consideration. Even the NDA had stated that. So, as far as policy goes, there was no real issue. You forget the government does not function in a vacuum. There is a statutory body that has the expertise to give its opinion on what should be done. TRAI 2003, ’05, ’07 and again in ’10, at every stage it said, as far as 2G spectrum is concerned, there should be no auction. This government followed TRAI. But you fault us there. The expert in 2007 tells us please don’t have auction in 2G, but the journalist in 2011 will say you should have had an auction.
What about the current raging controversy about the note from the finance ministry that says Chidambaram could have put his foot down about auctioning the spectrum?
It’s the same argument. In March 2011, you look back and make some comment on decisions made in 2007, what’s the relevance of that?
But this note has originated from the finance ministry itself and its says the former finance minister could have forestalled…
But is that a fact or an opinion?
It’s a factual position. Until 9 January 2007, Chidambaram disagreed with the DoT. Then on 15 January…
You are wrong about that. It’s an opinion. 15 January is after the event. The Letters of Intent had been issued by then. It’s after the event and the finance minister accepted it, what’s wrong with it? Before that he had an opinion that disagreed with the DoT, but the DoT prevailed.
The DoT said the TRAI has suggested another route and it will follow their statutory advice and he told the prime minister that I’m following the extant policy. And that was it. What’s so wrong about it?
But right through this tumultuous time, your government has not rallied together and stood strongly by its policy decision. This is not the first dissenting note. Several flags were raised internally; obviously there was disquiet over it. The PMO even put a file noting saying the PM’s office should be kept at an “arm’s length” from the DoT decisions. Given this, clearly, it seems people in the government turned their eyes away rather than came to a reasoned agreement.
That’s very unfair. Please tell me, before October 2010 when the CAG report was leaked, what was the allegation made against the government? Was there any controversy that the Opposition or the media raise between 2008-11?
There was Rajeev Chandrasekhar writing to the prime minister…
In December 2007, Rajeev Chandrasekhar himself wrote to Raja saying things looked perfectly OK. I can give you that letter if you want. See, I’m not saying absolutely nothing was wrong. On the issue of implementation, let the court decide what went wrong. If somebody is culpable, he should be dealt with. But on policy, you cannot fault the government for taking a decision consistent with the advice of the experts. The advice from TRAI was that there should be a level-playing field for 2G licences in 800, 900 and 1,800 MHZ bandwidth, because there were already lot of players who had got licences with low entry fee. It would have tilted the scale in favour of the existing players. I’m facing the same problem again today. With the legacy issue, there are people whose licences will have to be renewed in 2014 and they are going to have to pay because I have said now spectrum will be delinked from licences. So you will have to pay for even 4.4 MHz. Now these 122 licencees have not paid for 4.4 MHz. So those people are going to ask me — the new licencees — why should we pay? And if I take a decision, you will say I favoured one or the other, because I have to take a decision. And whatever decision I take will willy nilly end up favouring one or the other player. So you will say that is another scam.
Let’s put it this way: what do you concede went wrong, even if in hindsight?
Look, it is not fair of me to say what was done wrong for the simple reason that the matter is pending in court. Any statement I make would be misunderstood. My vision on this is futuristic. I came into the picture with some facts staring at my face, namely, the market had too many players and there was a feeling of downturn. I had to focus on bringing robustness back to the sector, ensure enough competition, ensure fairness to the consumer, ensure more investment in the sector so it becomes a revenue earner for the government. That’s my vision for the future.
For the past and what happened, there are courts that are looking at it. They will come to a conclusion, right or wrong. But the suspicion around why we did or did not auction the spectrum, I think, is not the fair way to look at the issue. In hindsight, you may call the policy wrong, and many decisions government takes are not necessarily right. In my education ministry, I might take a wrong decision, but that doesn’t send me to jail. It doesn’t equal bad intention. The trouble is this whole discourse has been reduced to an allegation of overall bad intention.
That brings us to the other big weakness of this government: perception management. Throughout this stormy year, why has it not been able to assert the simple distinction between corruption and policy disagreements, between what Raja might have done wrong in implementation and the overall policy? Why has it always been two steps behind the media and Opposition on every count?
You are right about this. Unfortunately because of the CAG report and the media carrying it 24/7, I don’t think we were able to combat the perception that this government has caused a huge loss of revenue. But the power of the media in the 21st century is so enormous that unless the media listens to the other side, the message will never reach the people. And I’m afraid the media never listened to us. The point is, the modern media — the world of electronic media especially — does not have the time to cogitate over matters and to bring a reasonable and fair perspective before the public. They don’t have the time. The eye of the camera is prejudiced unlike the human eye. The human eye takes within its vision the whole contour of a landscape; the camera’s eye blocks everything except its own narrow frame. It looks with a blinkered view and repeats that blinkered suspicion 24/7 to create a world that is unlike the world of the human eye. That is the heart of the problem. If the debate had been allowed to evolve and all points of view represented, which did happen in the print media, we would not be in this situation. But have we ever interfered or tried to curb anyone? Tell me anywhere in the world, if the electronic media has so much freedom to do what it does here.
Agreed, there is certainly scope for more proportion and complexity in media coverage. But even you could have been more proactive rather than reactive. But that’s a whole other long discussion. We’d like to focus on the other big-ticket tumult this year for the government: the Jan Lokpal Bill. Across the board, there is a feeling that your government handled the whole situation very badly. You were one of the key protagonists. In hindsight, what would you concede was done badly by you? What were the fair concerns the Hazare team raised? And what were the genuine constraints on the part of the government?
Let’s go back a little. Think back to Anna Hazare’s fast at Jantar Mantar in April. People arrived to protest. Should the government not have allowed it? Maybe if we hadn’t allowed it, none of what followed would have happened. But we allowed it consistent with democratic values. Then when the protest took a particular turn, what should the government have done? Not talk to him? If we hadn’t talked to him, you people would have come at us for not being democratic, for not reaching out to people who have a point of view. So again, the government was democratic and said, OK, let’s talk. They set terms and conditions for the joint drafting committee, we said, OK, if there is so much public concern — which is correct and justified — let’s have a joint committee. Corruption is a genuine concern for everybody, not just the common man, but the government too. But please remember also, corruption is not government-centric, it is a phenomena that permeates society at every level. Now had we not talked, we don’t know what the consequences would have been.
We are on the opposite point actually…
We had a series of meetings and I think from our side our conduct was exceptionally civil. At the end of every meeting, as spokesperson of the group, I was asked to brief the press, which I did. We didn’t call anybody any names, right? But we just could not agree on certain things because there were real constitutional impediments to what they were asking. What were the main points? They wanted the judiciary brought under the Lokpal. We could not agree as there is a constitutional impediment. Second, they wanted conduct of parliamentarians within Parliament to be brought under the Lokpal. We could not agree because there’s a Supreme Court judgment. If the judgment is not set aside, we cannot agree. We did not say that the judgment should not be set aside. If the judgment is set aside, there was no problem. Three, all civil servants and the power to dismiss and remove them should be vested in the Lokpal. We could not agree because that would violate Article 320 and 311 of the Constitution. We could not agree. So on many of these things we did not have a choice.
The irony is, after all the strident positions and the months of fast and turmoil that followed, in the final analysis, they eventually did give up these demands.
They have now accepted that the matter has to be taken to the standing committee. And that is all we were saying: please refer the matter to the standing committee and let it take a decision.
But did the whole dialogue have to become so adversarial? Why just the Jan Lokpal; shouldn’t all legislations have a consultative component as a norm?
But we have always done that. For instance, the Right to Education Act. How was that drafted? Arjun Singh had made me the chairman of the committee, but who were the members? All NGOs; there was hardly any government representation. So this perception that the government drafts laws without reference and public opinion is again completely wrong. Ask Vinod Raina how deep the consultation process went. Many things NGOs said is part of the law today. So the point is not that we did not consult. The problem was somebody said, it’s either my law or no law. That was the problem.
Fair enough. At least in the print media, there has been as much criticism of some of the Jan Lokpal team’s positions as the government. But why couldn’t the government come up with an inspired, well-intentioned Bill itself? Or a series of Bills that would incorporate many of the valid concerns that the Hazare team had raised — independent oversight, removing conflict of interest in the selection and removal process of the Lokpal, grievance redressal, whistleblower protection and judicial accountability (there is an extremely weak draft Bill in Parliament).
This is extremely unfair criticism. I’ll tell you why.
It’s the failure of the government to come up with a good draft Lokpal Bill that gave the movement second wind. Take something like the selection and removal process; your draft Bill vested that power back in government hands.
That’s not correct. How can you say government will control the Lokpal if there are two leaders of Opposition in the selection committee and the Speaker and judges and two members of the public? I don’t agree with you at all. You may argue that we should have a still wider committee and it should be tweaked. We can debate that but to say government was trying to control the Lokpal is completely wrong.
In any case, what I want to emphasise is that we were not against debating anything, but for anyone to insist that their own position is cast in stone and if one argues with that it will result in the distrust of people is very unfair. Also please acknowledge what we achieved. The heart of the official Lokpal Bill has already done what no country in the democratic world has done — the government has agreed to give away many of its legitimate powers of state to the Lokpal. Name me any country that has done this. But you are not willing to look at that. We said all public servants, Group A and above, will be under the Lokpal. We agreed that the Lokpal would be answerable to nobody, that they would work outside the system, in so far as they will have a separate investigative and prosecution agency. Show me any democratic constitution in the world where prosecution and investigation lies with the same agency. This is something that has never been done, ever. You will scrutinise the constitution of a selection committee, but you will not look at what else we did.
In all fairness…
No, you raised three issues. Let me answer those first. We told them we would constitute a separate mechanism for grievance redressal.
That was not made public.
No, no, it was said in the Cabinet. I said it, Jairam Ramesh said it. As far as the Judicial Accountability Act goes, we said will bring it into Parliament. Give us your suggestions and we will incorporate them. This is all part of the proceedings. The Whistleblowers Protection Act is already a Bill in Parliament; Jayanti Natarajan was the chairman of that committee. So all the points on which you are criticising us we were willing to address.
The grievance redressal component in the official draft Bill was very unsatisfactory. All this gave the Hazare team a lot of public ammunition.
Grievance redressal mechanisms have already been put in place by the Congress in various states. Yes, we need to strengthen them, become more transparent. We can have an honest, reasonable debate on all that. But I want to ask you something else — if this government is willing to provide food to everybody under the Right to Food Act, or education to everybody under the Right to Education Act, or provide employment under NREGA; if this government has provided RTI to everybody, why wouldn’t it want to create a strong grievance redressal or judicial accountability mechanism? I agree many things need to be strengthened or made more transparent but to fault the government that because you have not already done this you are corrupt or guilty of bad intention is unfair.
That brings us back to perception management, to seizing the discourse. The government has been seriously deficit on all this. Right through the Hazare crisis, it seemed completely headless, moving in 100 directions, constantly caught on the wrong foot, never in control. You swung from position to position — four Cabinet ministers go to receive Ramdev, later you arrest him; you sit with Hazare on a committee then you arrest him also.
First of all, we did not go to receive Ramdev.
‘Corruption is a genuine concern for everybody, not just the common man. It is not government-centric, it is a phenomena that permeates society at every level’
The eye of the camera sure showed that…
That’s just the perception that was created. There was no intention to receive Ramdev. I was part of that team. We had to meet him somewhere; it could either have been in the city or somebody’s office. The security people preferred the airport; we went with the expert opinion. You might say the airport was not the appropriate meeting place, and I might agree with you on that. But we did not go to receive him. Those are two separate issues. Secondly, he assured us at the airport that he would give up his fast in three days’ time and the mechanics would be worked out. This is what led to my interaction with him later and why we went along with him. It again shows the democratic nature of this government. Till he was being fair and reasonable, we were being fair and reasonable. It’s only when he went back on his word and we realised he was playing another game — which everyone knows now — it’s only then that I had to reveal the document on him. His arrest happened later. But there was no crackdown. The media should judge for itself because now you have all the footage of what he did and what he was not doing, the way he dressed up and the way he jumped.
What about Hazare’s arrest? Why arrest him and why in such a ham-handed way?
He wanted a particular place and unlimited time; we said it’s not appropriate because it was too close to Bahadur Shah Zafar Marg. He negotiated with us but, in the meantime, he made it known in the media that he was going to come to that place anyway with 20,000 followers. If we had allowed that, there would have been an even bigger crisis. If he violated the law, we’d be bound to pick him up, but with 20,000 people there, we didn’t want it to become an ugly situation. We didn’t want to precipitate any violence.
Whatever else the criticism of them, you have to hand the Hazare movement was completely non-violent. There are tonalities to these things. Suppose one accepts you needed to pick him up, Hazare could have been sent to a guest house rather than Tihar Jail.
That’s another issue. I have explained why we agreed to arrest him. Now, it was in the hands of the police and they sent him to a magistrate. The magistrate sends him to Tihar Jail. We don’t control the magistrate, so why should the government be responsible for it? We never told the magistrate what should be done.
This is the wash-our-hands-off stances that makes the government look either insincere or naïve. Surely these tonalities could have been managed?
Now you are assuming something that does not happen. This government doesn’t do this. It doesn’t talk to magistrates. It doesn’t issue backdoor orders. I’m telling you the gospel truth. Are you saying we should?
We ourselves were appalled when we learnt this had happened and we immediately put an application requesting the magistrate to please recall the order. And it was recalled. So the government had no intention of sending him to Tihar Jail — quite the contrary. His arrest was merely a preventive act, to stop potential violence, as Chidambaram explained in the House. We were trying our best to deal with the situation. But unfortunately the environment created for whatever reasons was such that nothing we did seemed right.
But things didn’t end there. There were the unsavoury and mysterious Amar Singh-Shanti Bhushan CD scandal. Then the ED began to go after Baba Ramdev. It all fed the popular idea of the government’s ‘dirty tricks department’.
I’m willing to talk. See, I have answered every question of yours and pointedly. I have not buried any question. Ask me any specific question, I’ll answer it.
Well, the Amar Singh CD vitiated things badly.
But what have we got to do with that? Somebody else circulates the CD. Shanti Bhushan files an FIR. The forensic laboratory he sends the cd to finds it doctored. Two other forensic laboratories find audio snatches genuine; the police filed a closure report with the magistrate that the audio files were genuine, but you still fault the government for it? What is the logic of this?
No matter how valid the investigation, the way it was timed against Ramdev is highly suspect. It comes across that anyone who questions government falls foul of it.
You know that’s always the case with any prosecution. Ramdev wasn’t on anybody’s radar. But when he came to the forefront, lots of facts came into the public domain. People naturally begin to file reports and complaints and we have to investigate them.
This sort of talk recalls the criticism that the top leaders of this government seem completely apolitical. You are seen — and have been — the chief trouble-shooter for the government. Forgive me for saying this, but from being the darling of the media, from being seen as a clean, good, strong politician, today the adjectives attached to you are arrogance, smarmy, a man who has a sort of narrow courtroom approach to large political issues.
What am I guilty of?
Precisely this attitude: at a time when the political class has already eroded all its capital, you predictably go after people who challenge you and seem to not understand the implications.
Well, first of all, it has nothing to do with me.
When we say you, we mean government…
You said I’m perceived to be arrogant. In what manner have I ever been arrogant? Please give me examples.
It’s in the tonalities…
That is not fair. If I stand my ground and say something with conviction, it is arrogance. If I concede, it is humility. Tell me what have I said that sounds arrogant. Today I’ve had an interview with you, is there any speck of arrogance? I have answered each of your questions with conviction. If conviction is arrogance, then I accept I’m arrogant.
Well, this is a calmer environment, not a heated adversarial situation.
But when have I been arrogant with anybody? In Parliament, outside Parliament, never. It is not my personality to be arrogant. This house is open 24/7 to anybody who walks in. Anybody, anywhere from India, no questions asked. Is that a sign of arrogance? I meet more people than perhaps MPs in their own constituency. Is that a sign of arrogance? I answer every question you ask. Is that a sign of arrogance? At no point have I taken any solitary decisions. If we took a decision to say no loss was caused, it was a government decision. If I negotiated with Ramdev, it was a government decision. If I negotiated with Hazare, it was a government decision. If we went to the media, whatever I said to the media was government’s decision. There’s been no individual decision in any of this, so why blame any individual?
Just to go back to the telecom controversy for a moment, the valid question Opposition parties have been asking is at what juncture did the PM or the Cabinet realise that Raja’s actions were not kosher and why was no alarm raised? Was this part of what the PM called ‘coalition dharma’?
You are misquoting the PM. He was asked by the media why the telecom ministry had been given back to the DMK and he explained that decision was part of the constraints of coalition politics. As far as Raja’s decision to pull back the deadline, if he takes a decision and gives two hours to people to come up with something, how can the PM get to know about it? What preemptive action can the PM take?
There was a series of letters exchanged between Raja and the PM on the issue of spectrum pricing…
But those were on policy issues. Let’s be clear, the PM was doing what he could do and he did what he could do. The Cabinet decision of 2003 was that the finance minister and the telecom minister have to sort issues on pricing. The latter stood his ground and his decision was accepted. The government went along with it as a matter of policy. Now, in so far as the faulty implementation goes, you can say whatever.
There is a larger political question. This government came in on a very feel-good mandate. It has frittered a lot of its goodwill in these three years. There is a huge sense of stasis, drift, lack of leadership or cohesion. The Jan Lokpal movement has eroded people’s trust in politicians even more. What measures can you take to rekindle people’s trust for politicians?
I think the man on the street wants to live his life peacefully and be provided the basic necessities of life: water, sanitation, education, health, transportation and enough food to eat. These are the problems of the common man. This government has addressed these problems like no other government in the past. 2014 will tell you what the result of that is. No matter what you might say today, we will continue to do our work. Even on corruption, let me tell you, what this government has done and will do is more than any government has done in the past.
‘If I stand my ground and say something with conviction, it is arrogance. If I concede, it is humility… If conviction is arrogance, then I accept I’m arrogant’
For example, apart from reducing discretionary powers in the functioning of government, we are moving in many different ways to deal with corruption. Law is only one very small part of it. Statutes and legal frameworks do not put an end to corruption. That’s the experience not just of India but all civilisations of the world. We need systems and systemic changes to go with it. We are already enacting the Public Delivery System Act. If you have the UID, you can target people who need subsidies to get the subsidies. If you can get your tax refund electronically, or pay your insurance premium or get your subsidies with less and less human interfaces, you reduce the chance of petty corruption. If you have a single exam in 2013, which I’m trying to do which has an all India merit list, you can reduce the scourge of capitation fees. What we need to do as government is to address these issues and we are doing that.
I mean, today, the agricultural community is very happy because they have never had the prosperity that we have provided by enhancing the procurement price. So, let’s not let not our vision be reduced only to debates in television studios. We respect criticism. After all, if you ask me, could we have done things better? My answer would be yes. But if you ask me did you deliberately do this badly, my answer is a categorical, no. Whatever steps we took, we took with circumspection, we tried to be democratic, tried to reach out, tried to explain our position. But in the environment that prevails today, we were not able to do it and this is why I’m sitting with you. And I have answered each of your questions as best as I could.
You talked about politics. Ultimately, politics is about sincerity. It’s not about defrauding and managing things, it’s about the sincerity with which we work and I can assure you there are many ministers in this government who work with 100 percent sincerity and it will pay at the end. You may fault us today but you will realise that what we are doing is for the good of this country and for the common man.
Final question. The Jan Lokpal campaign is a sleeping tiger. If things don’t go well in the Parliament Standing Committee, we are likely to see the winter session of Parliament washed out. A key component of all this is the independence of the CBI. Even with the Supreme Court monitoring it, the telecom investigation seems a bit selective. How can overall credibility of government be restored?
One second, how do we restore credibility to the media? Tell me. Do I have a solution for it? Do you have a solution for it? No. Therefore, the only route we have is to allow greater independence. At the moment, you’re saying the credibility of the CBI is zilch. Who is monitoring it? Not the Government of India. It’s being monitored by the Supreme Court. I can understand that you say government has no credibility and has vested interests, but now you are indirectly suggesting that even this monitoring process is wrong and has no credibility.
I think we are all in a very sad state if we cease to trust each other altogether. We can only try bringing credibility back into the system bit by bit. I am willing to be scrutinised by anybody, without protection. Tell me, in this country, who is more accountable than politicians? All the people in jail or who are being prosecuted are politicians. But is even one bribe-giver being talked about? After all in a bribe, there is a bribe-taker and a bribe-giver, why are you not talking about the bribe-givers? It’s easy to target a politician and target a government. No one is talking about how the system or society itself has become corrupt. You’re just talking about government, government, government. And just because there have been one or two high-profile instances of corruption, you are blaming the whole government. You have people saying, saare mantri chor hai (all politicians are thieves). Is that fair? Ki agar Jan Lokpal aega toh sab jail jaenge (If the Jan Lokpal comes into place, all of them will be in jail). Is that fair? Is such public discourse fair?
Certainly not. And we have been critical of such simple-mindedness ourselves.
So where do we stand? Ultimately, you have to start from a position of trust. If you live in a family and there’s no trust, the family will fall apart. If you don’t trust your parents, parents don’t trust their children, brothers don’t trust each other, sisters don’t trust brothers, the family will fall apart. Now we have people who are trying to create a situation where you trust nobody. Take it from me, if you keep putting this thought out in the public domain that you can’t trust anybody, this family of 1.2 billion people will fall apart. And that is as much the responsibility of the media as it is ours. So please don’t take this to that level and don’t attribute motives randomly. We may have done something that you don’t agree with but don’t attribute motives to us.
The stated objectives of the government behind issuing 157 licenses at the 2001 rate
1. To increase the teledensity and affordability of mobile services. To achieve that, A Raja said he wanted to introduce new telecom operators so the ‘cartel’ of existing companies could be broken. While the fact is that government-owned MTNL and BSNL were also among the existing operators and could hardly be described as being part of any ‘cartel’.
2. At the time there were 6-8 telecom players in each circle. Raja intended to take it up to 14-15 per circle. In 2007 the global norm was 3-4 players in a region.
3. The average spectrum holding with each existing players was 5.2 MHz. The global average was 18 MHz. Given India’s vast population, to provide efficient and effective services a mobile operator needs at least 12-15 MHz spectrum.
4. The average call rate in India was 80 paisa per minute in January 2008.
5. The number of existing subscribers in January 2008 was 249 million.
6. About 700 MHz of scarce 2G spectrum was available with the telecom ministry.
7. Giving the available spectrum to new players at the 2001 rate would ensure a level playing field, Raja contended. The benefit of cheap spectrum would percolate down to the consumer as new players would introduce low call rates.
8. Though the TRAI was not in favour of the auction of 2G spectrum, it had recommended finding a reasonable market-based price. The finance ministry and the PMO also recommended the revision of the entry fee.
9. Raja overruled both and went ahead and issued the letter of intent to eligible applicants at the 2001 rate.
10. The process of licence and spectrum allocation for new licencees began in February 2008 and continued till May 2009.
This is how the policy has played out
1. About 500 MHz was allocated to 122 licencees while 200 MHz went to existing CDMA players, primarily Reliance and Tata.
2. According to the TRAI report, out of the 122, as many as 74 have not rolled out services. Between them roughly 400 MHz is lying blocked without being utilised. As a result, the government did not only lose on the justified market price of this precious resource at the time of start- up spectrum allocation but there is also an accruing annual loss in the form of annual spectrum charge that a telecom player pays to the government as part of the revenue sharing agreement. In May 2010, the TRAI pegged the price of 6.2 MHz of 2G spectrum at Rs 15,934.82.
3. Today there is virtually no spectrum in the 2G band left to be allocated. DoT has issued show cause notices to 69 of these licencees asking why their licences should not be cancelled. But what lies ahead is years of litigation and until the matter is legally settled (and from the looks of it the matter may be fought right up to the Supreme Court) the licencees are unlikely to vacate the spectrum.
4. The number of subscribers as of today is roughly 800 million, marking an increase of 650 million subscribers since January 2008 when Raja began the process of allocating new licenses. But out of this, only 40 million new subscribers, which is less than 5 percent of the total increase in the subscriber base, are using the services of the new licencees. The rest have gone to old operators.
5. The average call rate today is 60 paisa per minute, marking a 25 percent decline since 2008. But industry experts say that this is the result of natural business cycle and increased competition between old players who are ready to operate on extremely thin margins.
6. Almost 80 percent of new licencees are as good as non-existent.
7. The two key milestones for increasing teledensity — affordability and rollout — have not been met, that is the call rates have not dropped substantially and new operators have hoarded spectrum, instead of rolling out services.
8. On every count, the UPA’s telecom policy has failed miserably and has set the industry back by many years. But instead of owning the moral responsibility for disastrous policy decisions, if not the corruption that prevailed in DoT, the government has been deflecting the issue by calling it a political conspiracy.
9. Financial institutions and international investors do not want to invest in the Indian telecom sector anymore. Until the 2G mess created by Raja is sorted, which means the disposal of the CBI case and other related litigations, it would be hard for the government to revive investor confidence.
10. In this backdrop, incumbent minister Kapil Sibal’s move to draft a new National Telecom Policy is like locking a stable door after the horse has bolted. The real need for a NTP was in 2006-07 when Dayanidhi Maran and Raja were running the ministry as their personal fiefdom.
Note: PC Was In the Know
Does the note drafted by a deputy director in the finance ministry really nail then finance minister P Chidambaram? Ashish Khetan analyses the evidence
ROBERT BOLT’S play A Man For All Seasons, based on the true story of Sir Thomas More, the 16th-century Chancellor of England, refers to an incident when Sir More was urged by his daughter Margaret and his son-in-law Roper to arrest a man they regarded as evil. Margaret said. “Father, that man’s bad.”
More, who is depicted in the play as a man of principles, replied, “There is no law against that.”
Roper said, “There is! God’s Law.”
More then said: “Then God can arrest him. I know what’s legal, not what’s right. And I’ll stick to what’s legal. I am not God. The currents and eddies of right and wrong, which you find such plain sailing, I can’t navigate. I’m not a voyager. But in the thickets of the law, Oh, there I’m a forester.”
As soon as the sensational note on 2G spectrum pricing, dated 25 March and prepared by a deputy director in the finance ministry, detailing the failings of former finance minister P Chidambaram to stop A Raja in his tracks came to light, the warriors of righteousness led by anticorruption crusader Anna Hazare sprang up on TV demanding that Chidambaram, now home minister, should be sent to jail. Hazare thundered that if there were a Jan Lokpal in place, Home Minister Chidambaram would have been in jail. BJP leader and former NDA finance minister Yashwant Sinha said Chidambaram’s rightful place was the same prison cell where Raja has been incarcerated.
However, for the Supreme Court, which has been hearing Janata Party President Subramanian Swamy’s plea to instruct the CBI to probe Chidambaram, the matter has not been that simple. At the time of going to press, the Supreme Court after three weeks of intense arguments by all the parties involved had adjourned the matter till 29 September.
Swamy had moved the application before the apex court in May and it was finally taken up by the court on 8 September. Since then the counsels of CBI and the Centre have had heated arguments in court. Prashant Bhushan, appearing for the Centre for Public Interest Litigation, the petitioner in the 2G PIL that led to an apex court-monitored probe, has supported Swamy’s plea in the court. But the CBI has contested Swamy’s plea by saying that there was nothing new in the finance ministry note and that they have already looked into the role of the finance ministry officials and have not found any evidence of corruption against Chidambaram.
On the other hand, the Centre has argued that the new documents filed by Swamy, particularly the finance ministry note, would naturally be looked into by the CBI. But there was no need for specific instructions by the court to that effect and the stage had come where the apex court should stop monitoring the probe, argued the Centre.
At one point in the hearing, the senior counsel appearing for the Centre, PP Rao, told the two-member bench of Justice GS Singhvi and AK Ganguly that the bench should not cross the Lakshman Rekha and must act in accordance with law.
Justice Ganguly replied: “Had Sita not crossed Lakshman Rekha, Raavan would not have been killed. Lakshman Rekha is not sacrosanct. Lakshman Rekha is for a limited purpose.”
As the matter remains delicately poised, an intense debate has been raging about whether Chidambaram is also criminally culpable for the 2G scam. Was there a meeting of minds between Chidambaram and Raja on the issue of spectrum pricing? Did Chidambaram concur with Raja over the issue of not revising the entry fee and supported him in his decision to allocate the 2G spectrum at the 2001 price? Is Chidambaram merely guilty of being a lax policymaker or was there a guilty mind behind his policy failures?
The note lists more than half-a-dozen occasions on which Chidambaram could have forestalled the scandalous process of allocation
The note, which was reportedly vetted by present finance minister Pranab Mukherjee before being sent to the PMO, lists more than half-a-dozen occasions on which Chidambaram could have forestalled the scandalous process of licence and spectrum allocation at the throwaway price and thus prevented the 2G scam.
The fact that Chidambaram and his ministry had been opposing Raja’s moves in the months of November and December 2007 was already well-known. The CAG report of November 2010 and the CBI chargesheet of April this year had narrated in great detail as to how Raja had obstinately overruled the objections raised by the finance ministry under Chidambaram and went ahead and issued letters of intent to 122 applicants on 10 January 2008. In fact, the CBI has used the objections raised by the finance ministry as one of the strong grounds to nail Raja. It says, “Despite repeated suggestions from various corners of the government for the revision of entry fee to be charged, Raja deliberately and dishonestly did not consider auction or revision of entry fee.”
But what the new note does is that for the first time it reveals the chronology of events from 9 January 2008, a day before the scam, to 11 November 2008, and points out numerous occasions when the then finance minister could have carried out his duty and red-flagged the move of spectrum allocation at dirt-cheap rates, thus preventing the scam. But Chidambaram did not do so. On the contrary, he wrote to the prime minister saying that the matter of spectrum pricing for start-up spectrum proposed to be given to the new licencees should be treated as a closed chapter. The note places the blame firmly and squarely on Chidambaram’s doors for his repeated policy failures.
On 9 January 2008, a day before Raja set the scam in motion, a meeting of the high-powered telecom commission was scheduled. Besides DoT officials, representatives from the MoF, industry, IT and Planning Commission are members of this commission. One of the items on the agenda was pricing of spectrum. As per the established procedures, it was incumbent upon Raja to place the matter of spectrum pricing before the commission so that it could deliberate on the merits of TRAI recommendations and DoT’s proposed moves.
The secret note reveals for the first time that the additional secretary (Economic Affairs) of MoF was ready with a detailed concept paper recommending both revision of the entry fee fixed in 2003 as well as adoption of an auction methodology for determining spectrum charges and was scheduled to place it before the commission. So had the meeting taken place and the note of the AS (EA) been put up, Raja would not have been able to go ahead with his surprise announcement on 10 January asking the ‘eligible’ 122 applicants to collect letters of intent (LoI).
The note reveals for the first time that a meeting was to be held recommending auction methodology but was cancelled at the last minute
But suspiciously the meeting was cancelled at the last minute. And a day later, which is 10 January, Raja issued the LOIS to 122 new telecom players. On 15 January, when the meeting of the telecom commission was finally convened, the MoF didn’t place the due concept paper recommending revision of entry fee. The secret note says, “The MoF representative who attended the meeting did not raise the issue of revision of entry fee.” So in a period of six days the MoF changed its stance without giving any justifiable explanation for its volte face.
Instead, Chidambaram used this position paper to draw the curtains on the issue of revision of entry fee. “This position paper was used by then FM as a basis of his secret note to the Prime Minister on 15 January 2008 wherein, an auction-based mechanism was recommended for future allocation of spectrum (beyond the ‘startup’ spectrum), with the spectrum allocations having been made in the past to be treated as a closed chapter,” reads the MoF note. So a concept paper that was supposed to put a spoke in Raja’s wheel, was instead used to cover up his acts.
The question arises: What made Chidambaram do a turnaround?
The CBI in its chargesheet has given a justification. It says that when later the MoF raised the issue of revising spectrum charges, the DOT contested that it was contractually obliged to issue contracted amount of spectrum to LoI (letter of intent) holders. So in effect the CBI says that Raja’s insistence that since LoIs had been issued and the DoT couldn’t go back on its contract was accepted by the MoF.
The question is whether Chidambaram who, besides being the finance minister on two occasions, is also a leading lawyer of the country, saw merit in Raja’s arguments and thus gave up his original position on spectrum pricing? Were Raja’s arguments legally tenable? Couldn’t the MoF ask DoT to rescind the LoI and put a stop to the whole process? Sure, a few LoI holders may have gone to court, but couldn’t the government have successfully defended its position in a court of law? These are the questions the CBI should have tried to answer legally and logically. But surprisingly the CBI didn’t even deem it fit to record Chidambaram’s statement, leave aside addressing such a glaring lacuna in its investigation.
The note further says, “Subsequently, in a meeting held on January 30, 2008 between the then Ministers of Finance and Telecommunications, it was noted by the then Finance Minister that he was now not seeking to revisit the current regimes for entry fee or revenue share.”
But in the Ministry of Finance the matter continued to be debated among the bureaucrats whether the entire range of spectrum, including both start-up and additional spectrum, could be charged at the current market price.
“An internal note on the subject was prepared in DEA on 11 February 2008 wherein the entire range of spectrum was proposed to be charged with for both new and old operators using the entry fee as the price of embedded spectrum and indexing it with the increase in the AGR of the telecom sector between 2003-04 and 2007-08,” says the note.
The CBI will be in a tight spot if the apex court instructs it to look into the circumstances under which Chidambaram ‘concurred’ with Raja
But Chidambaram in a note dated 21 April 2008 sent to Raja conveyed that a new pricing mechanism may be considered for spectrum beyond 4.4 MHZ (which was start-up spectrum given along with the licence).
But within a span of three days, the MoF changed even its new stance and now took the position that ‘spectrum up to 6.2 MHZ may not be priced and spectrum beyond 6.2 MHZ may be priced using the Adjusted Gross Revenue (AGR) method.’ Since the new licencees never got spectrum beyond 6.2 MHZ, the new price mechanism never kicked in.
Paragraph number 17 of the note, while laying down a solution that the MoF could have adopted to queer Raja’s pitch also indicts Chidambaram for concurring with Raja on the issue of spectrum pricing. It says, ‘There was a way out by invoking clause 5.1 of the UAS licence, which inter alia provide for modification at any time the terms and conditions of the licence, if in the opinion of the licensor it is necessary or expedient to do so in public interest or in the interest of the security of the State or for the proper conduct of the telegraphs. DoT could have invoked this clause for cancelling licence in case MoF had stuck to the stand of auctioning the 4.4 MHZ spectrum. Perhaps some litigations would have arisen as a consequence.
‘It may be mentioned that while the UAS licences were signed between 27 February and 7 March 2008, spectrum allocations were done starting only in April 2008, almost four months after the LOISwere issued. However, these were not charged since there was consensus at the levels of the ministers concerned.’
It is this paragraph that the Congress is now calling an opinion of a lowly bureaucrat.
All eyes are now fixed on the Supreme Court. If the apex court instructs the CBI to closely look into the circumstances under which Chidambaram ‘concurred’ with Raja, it would not only be a big setback to the UPA, the CBI too would have to come up with logical reasoning to explain Chidambaram’s turnaround.
However, this note and the facts narrated in it are themselves not enough to make a case of criminal conspiracy against Chidambaram. On the current evidence, however, many would argue that Chidambaram’s position as a Cabinet minister becomes untenable. If not for the 2G scam, Chidambaram should own up the moral responsibility for a colossal policy failure.
Ashish Khetan is Editor, Investigations with Tehelka.
Shoma Chaudhury is Managing Editor, Tehelka.