How UPA’s coalition compulsions led to 2G scam

Meetu Jain
Meetu JainDec 20, 2017 | 22:54

How UPA’s coalition compulsions led to 2G scam

It was Maran, in consultation with his party DMK, who decided to sell the spectrum at throwaway prices.

With one day to go before the judgment on 2G spectrum scam is announced on December 21, there's one thing that must be urgently recalled. In the technical jargon that passes for 2G scam analysis, amidst all those figures of gigantic corruption, what is often overlooked is what really started the fire.

Because, the scam in a nutshell was about "spectrum", a scarce natural resource, being sold for a song in 2008 at prices prevailing in 2001.


How and why did this happen and who were the major players? Because, at the heart of it all were the compulsions of coalition dharma.

Spectrum pricing, which was to be decided by a group of ministers (GoM) headed by the then defence minister Pranab Mukherjee, was finally "fixed" by the then telecom minister, Dayanidhi Maran. It was Maran, in consultation with his party DMK, who decided to sell the spectrum at throwaway prices.

So, how did he do that?

The foundation of the scam was laid in 2006, when the group of ministers headed by Mukherjee was constituted to look at various issues of spectrum. Buried among the terms of reference was a term - "spectrum pricing".

Dayanidhi Maran's letter to the then Prime Minister Manmohan Singh.Dayanidhi Maran's letter to the then Prime Minister Manmohan Singh.

When Dayanidhi Maran saw what the terms of reference were, he was furious. He shot off a letter to the then Prime Minister Manmohan Singh, which read something like this:

"You had kindly assured me that the Terms of Reference of the GOM would be drawn up exactly the way we wanted... I am however surprised to note that the GOM as constituted has much wider Terms of Reference, some of which I feel impinge upon the work normally to be carried out by the ministry itself. ...I shall be grateful if you could kindly instruct the concerned to modify the terms of reference as suggested by us which are enclosed."


Sure enough, by the end of December 2006, the new terms of reference had been duly drawn up. The UPA government had signed on the dotted line as ordered by the telecom minister. That the UPA could be told so to oblige the tantrums of a mere telecom minister, at gunpoint as it were, is not surprising.

The DMK, with 18 MPs, was crucial in supporting the central government that had been formed with a wafer-thin majority in 2004. Allocation of scarce natural resources - such as spectrum and coal - happened to be the two major decisions taken by the UPA government in 2006-2007, both of which came to haunt it during UPA-2.

Surprisingly, it was the finance ministry that was pushing for the spectrum pricing to be decided, not by the telecom ministry, but by the GoM. File notings of the finance ministry have the then minister P Chidambaram inquiring whether the issue had been settled or not.

Successive finance secretaries, urged by Chidambaram, made a case for spectrum pricing to be done at market rates prevailing in 2008, and not at the drastically reduced 2001 prices.

Former finance secretary Ashok Jha even wrote to the then cabinet secretary BK Chaturvedi, asking him to intervene. "Spectrum pricing and allocation have far reaching consequences for the economy and need to be debated. The contention of the DoT (department of telecom) that these issues are within its normal range is not entirely correct," Jha had written.


Similar requests were made by the then finance secretary D Subbarao to the then telecom secretary DS Mathur, but to no avail.

It's ironical that while fellow DMK politician and a member of the UPA-1 cabinet, A Raja, spent time behind bars, Maran was exonerated in the Aircel-Maxis case. As it happens, the tiny matter of spectrum pricing remains a policy issue to be collectively decided by the group of ministers and even the Union cabinet.

With 2G scam verdict due on December 21, that's the devil in the detail that many would like to keep their eyes on.

Last updated: December 21, 2017 | 10:19
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