Posts Tagged ‘ Manmohan Singh ’

The Smelly 2G Spectrum Scam

It will be a pity if Telecom Minister A Raja gets off the hook on technicalities. That’s what he is trying to do. When questioned about the resounding success of the public auction of the 3G spectrum compared the pathetic revenue generation during the 2G spectrum sale, the minister went to great length explaining the technicalities of the auctions by using the analogy of ‘Basamati rice’ and ‘PDS rice’.

 So let us make an attempt to understand the difference between basmati and public distribution system rice. The auction for ‘Basmati’ 3G mobile license, through a transparent auction, ended with RCom, Bharti and Aircel bagging 13 circles each, and left the Government of India with a Rs. 67,710 crore revenue windfall. The revenue amount exceeded the wildly optimistic expectations of Raja at Rs. 40,000 crore and even Finance Minister Pranab Mukerjee’s estimate of Rs. 35,000 crore. And if you compare the all India average price of the ‘PDS’ 2G and ‘Basmati’ 3G, the difference was a staggering 900 per cent or 9 times.

Exactly an year back, when the ‘PDS’ 2G spectrum was auctioned under the guidance of Raja, using a contentious ‘first-come-first-served’ system, in the way movie tickets are sold. Raja selectively interpreted recommendations of the TRAI to favour a privileged few for whom the rules of the game were changed. Under the influence of the corporate lobbyist Niira Radia, some non serious players like Unitech, S Tel, Swan Telecom, Loop Telecom (BPL having exited business once),  Sistema Shyam TeleServices (MTS), Allianz Infratech, Datacom (Videocon) and Spice, won an ‘all-India’ mobile telephone licence with bundled spectrum for just Rs 1,651 crore.

But soon after the ‘PDS’ 2G licence sale, the public distribution rice suddenly turned to gold.  Within days of getting the licences, the new entrants who had no telecom assets but for a ‘paper licence’, gifted by Raja, sold part of their stake at huge premium. To get a clearer perspective, in Sep 2008 Swan Telecom sold 45% stake to UAE’s Etisalat for around Rs. 4,200 crore. A month later Unitech offloaded 60% to Norway’s Telenor for Rs. 6,200 crore. Then in Jan 2008, Tata Teleservices sold 26% stake to Japan’s DoCoMo for 13,230 crores. The ownership and ownership transfer deals of Shyam and Russia’s Sistema and Siva Ventures and Bahrain’s Batelco are shuddered in secrecy. Some of the companies like Allianz Infratech and Datacom are yet to launch or struggling to launch services and the licence of Spice has been cancelled.

India is a lucrative 300 million mobile user market which adds about a 100 million mobile users every year. The smelly PDS license distribution was Raja’s strategy to bring in foreign telecom players like Sistema, Batelco, Telenor, Etisalat, DoCoMo,  etc to come into  India’s lucrative market, through the backdoor, unmindful of the loss to the Indian exchequer, using the faulty methodology and government iron hand. Much of this corruption which allegedly borders Rs. 1 lakh crores, took place under the nose of our most honorable PM Manmohan Singh.

On Nov 2 2007, PM wrote to Raja and asked him to ensure the 2G spectrum was allocated in a fair, efficient and transparent manner and to ensure that the licence fees are appropriately revised. A brazen and defiant Raja, did absolutely nothing to adhere to the PM’s directions and granted 2G license for just Rs 1,651 crore. And technically, since there was no auction we can only estimate the government losses in 2G spectrum licence to Rs 40-60,000 crores.

Our country has a long history of dubious characters getting off the hook on one technicality or another. Raja claims that all his decisions had been taken ‘in consultation’ with the PM. The DMK and Karunanidhi claims that Raja is being targeted because he is a ‘Dalit’. Not too long ago, during the formation of UPA II, the Dravidian Patriarch Karunandidhi had to forgo the claims of his own daughter Kanimozhi and nephew Dayanidhi Maran to promote Raja as the Telecom Minister for a second term. Why did Karunanidhi have to promote Raja more than his dear family? Is Raja is conduit for the dirty money for Karunanidhi?

Thanks to the political compulsions of the UPA, the Comptroller and Auditor General of India, Central Vigilance Commission and Central Bureau of Investigation probe might not nail this new found Dalit messiah of DMK. The STel case in the Delhi High Court, sure gives a glimmer of hope, because we Indians still have some ‘trust’ in our judiciary.

No technicality can hide facts that stare everyone in the face – that spectrum sale was a money game before the last General Election while the exchequer lost at least the same amount of money that we gained from the 3G sale because we positioned 2G as the ‘smelly PDS rice’. That obscenely huge amounts changed hands which makes me wonder if the  DMK today stands for ‘Delhi Money for Karunanidhi’.  And thanks to the lobbying and murky deals that flourished in the culture he singlehandedly promoted in the Telecom Ministry, this 47 year old MP from Nilgiris, Andimuthu Raja, has shown that the great Indian telecom revolution has a rather murky underbelly.

Photo: Copyright Hindustan Times.

Dantevada & War on Tribal Terror

The ghastly massacre of about 74 (or perhaps more; there is no universally acceptable figure) CRPF Jawans by the Naxals has evoked sharp reactions across political spectrum. While debates rage over what our attitude to the paramilitary forces, on whether the government should use Air Power against the Naxals or not, one needs to understand and analyse why the Maoists are on the suicidal course.

Reactions to the guerrilla ambush ranged from “its time we cracked down on these Maoists’ (the common response) to “these men were there to attack the Maoists so they must have expected to be ambushed” (the view of the radical chic lunatic fringe). But the entire political class is united for taking on the Maoists, whose insurgency has been described by Prime Minister Manmohan Singh as the biggest internal threat in recent years. The government, allies, former allies and BJP have supported the anti Naxal offensive.

But a small mention in the inside pages of my newspaper, of reprimand issued by the Congress in a rather restrained language against senior Congress leader and former Madya Pradesh CM Digvijay Singh caught my attention.

Little research and boom…. In his signed article in one of the English dailies, Digvijay differed with Chidambaram’s approach of treating the Naxalite issue as a law and order problem alone. He, in fact urged the government to frame its anti-Maoist strategy. In what seemed to be a rather personal attack, Digvijay wrote “I have known P Chidambaram since 1985 when we both were elected to Parliament. He is extremely intelligent, articulate, committed and a sincere politician, but extremely rigid once he makes up his mind. I have been a victim of his intellectual arrogance many times….” Making a reference to Chidambaram’s propensity to describe anyone critical of the Operation Green Hunt as Maoist sympathisers, Digvijay wrote there is a suspicion that “the real intend of the state’s strong action against the Maoists is to facilitate the mining giants that have signed MoUs with the state.”

Is this line of thinking a digression from the key issue of Maoist mayhem? Why the prime objective of the Maoists is to overthrow the State? Is it because they believe the State gives land to the mine owners to extract iron ore and other minerals and deprive the tribal of his traditional right to use the land and forest produce? Why are the Naxalite strongholds the Chhattisgarh, Jharkand, Bihar, Orissa, AP and Bengal belt, which is rich with natural resources? Are nearly all of the Maoist leaders not intellectuals from colleges and cities, who feel comfortable in the isolation of their forested hideouts and headquarters? Why are they able to brainwash the poor tribal people to rise and use bows and arrows, their traditional weapons, against the security forces as the first charge or line of attack prior to the second or third of well armed and well trained cadres? Why is the ‘calm, composed and competent darling of the India’s liberal media getting all worked up when it comes to tribals and unwashed Naxal Maoists? Why does he brand well meaning intellectuals as Naxalite-extremists? What prompted such a ghastly attack?

Let us recap the incidents before the ghastly attack. The Naxal’s had offered a 72-day conditional ceasefire to the government on Feb 25 2010, which the government scoffed at. Chidambaram termed the truce offer by the Maoist leader Kishenji as “bizarre”. When Chidambaram visited Lalgarh on April 4, everyone expected a series of confidence building measure to enthuse the Maoist cadres to eschew violence and return to main stream. But Chidambaram tried to pass the buck to states (He got a befitting reply from Bihar Chief Minister Nitish Kumar who wanted him to work more and speak less and control his ‘tone and tenor’) In his usual style Chidambaram added that the Maoists were “cowards hiding in jungle” and fixed a 3 year timeframe for their elimination. The Maoists hit back in 48 hours, butchering the hapless CRPF Jawans. A rattled Chidambaram hurriedly termed the Maoists “savage” as if the whole issue hinged on the adjectives he used.

Immediately after taking over as Home Minister Chidambaram had mandated the Operation Green Hunt – to clear the tribal area of insurgent groups, hold the territory to ensure the Maoists can’t re-enter and, finally prepare the ground for development projects by ‘civilian agencies’. Read again, this sure doesn’t read like a mandate for counter insurgency mission in the jungles where paramilitary forces are expected to ‘fight guerrillas like a guerrilla’ and not capture or hold territory. But then for whom is this mandate intended?

A look at the interests of the London based MNC – Vedanta Resources Plc, (, one of the World’s largest mining company – gives enough clues. Of India’s total Aluminium capacity of 1.3 million tonnes, Vedanta’s share is 0.3 million tonnes. Its 0.5 million tonne smelter in Orissa’s Jharsuguda is getting commissioned and the company will ultimately create 1.6 million tonnes of smelting capacity there, to be backed by a 5 million-tonne alumina refinery at Lanjigarh and a power complex of 3,750 MW. Its subsidiary BALCO (Bharat Aluminium Company, the erstwhile public sector unit put on the block, as far back as in 2001, by the NDA Government and controlling stake acquired by Sterlite Industries, a group company of Vedanta for consideration of Rs. 551.50 crores) has its capacity upgraded to 1 million tonnes.

In Lanjigarh alone Vedanta has access to bauxite deposits of 75 million tonnes and the government has promised an equally large deposit nearby. A 5 million tonne refinery is justified provided links to bauxite deposits lasting for about 50 years can be acquired. Orissa, where most of Vedanta’s aluminium action is to unfold, has an estimated 1.7 billion tones of reserves. Vedanta claims to free deposits because of the world’s single largest smelter it is committed to building at Jharsuguda. If Vedanta has its way all this capacity will be on the ground by 2013 and to realise its mission to ‘put India on the global metals and mining map’.

But there is problem. These reserves lie under the tribal forestland. It all depends if the ruling class can secure and deliver this land, a task Chidambaram has taken upon himself. But why Chidambaram is the points-man and why is all the parties of different hues steadfastly behind the Home Minster?

Answer to this goes back to 2003, when Chidambaram was cooling his heals, when NDA Government was in power. He represented Sterlite Industries (with 59.9% ownership with Vedanta) before the Bombay High Court, when it faced charges of avoiding customs duties and tax evasion. Shortly afterward Chidambaram became a director on the board of Vedanta and only surrendered this job on May 22, 2004 – a day before taking up the position of Finance Minister of India in the UPA Government.

The fact that our Honourable Home Minster P Chidambaram had a close relationship with Vedanta raises a serious question about the motive, agenda and mandate of Operation Green Hunt.

With an orchestrated neo-liberal media baying for ‘full-scale war’, Chidambaram have started gun-wielding area-domination operations. This time around commandos of the Special Action Force who have been specially trained to fight Naxals are deployed. Tribals are fleeing their villages but the political class is united in the fight. The BJP which rules the states of Chhattisgarh and Jharkhand and in partnership in Bihar and Orissa has a lot at stake. The Left blames the Maoists for supporting Mamtha Banerjee and aiding their defeat in the last General Election, is looking for payback. Poor Mamtha yet again caught napping, thunders and declare that there are no Maoists in West Bengal.

So while ideological unity with the ‘war of tribal terror’ (let me borrow from my favourite President Bush) do not deserve even a modicum of attention, what behooves on the Government of India and Prime Minister Manmohan Singh, is to train adequate attention to economic welfare that can result wiping out of class struggle. Naxal movement sure is a class struggle. Let us stop the possibility of the emergence of a skewed national economic scenario that would leave certain sections of the population high and dry, while the mining giants plunder our natural resources in the name of ‘putting India on the global metals and mining map’.

If the Maoists believed in shooting their way to revolutionary glory, Chidambaram seems to believe in shooting off his mouth and jumping the gun with his thoughtless rhetoric. The aspect, poor Digvijay Singh couldn’t articulate well is the lack of ‘moral authority’, blatant ‘high-handedness’ and even graver ‘conflict of interest’ on the part of the Home Minister.

Illustration Credit : The Red Corridor courtesy Wikipedia.

Economic Downturn – Action & Reaction

Action: Three of the “Big Fives” of Wall Street – Bear Stearns, Merrill Lynch and Leman Brothers have disappeared. The two largest home mortgage institutions of US – Feddie Mac and Fannie Mae were rescued from bankruptcy because the government has effectively taken them over, just as it has effectively taken 80% of AIG. CITI Group is surviving by purely because of cash infusion by sovereign wealth funds.

When you look at this list, it really drives home the seriousness of the current US economic climate. The most arrogant symbol of American capitalism – the Wall Street had been barely saved from destruction by the most ‘capitalist’ nation on earth suddenly behaving like the most ‘socialist’. Let’s face it George Bush has just ‘nationalised’ the largest American insurance company AIG just as Indira Gandhi has done in her heydays.

Reaction: Our Harvard educated Finance Minster P Chidambaram rushes to in to say that India is insulated from the crisis looming large in the US. Rightfully so, because he is trying to prevent panic in the Indian Investors mind. But it just reminds one of the Oxford educated Dr. Manmohan Singh’s pat on his own back for the soaring Sensex during Harshad Mehta’s heyday. Dr. Singh attributed the then skyrocketing index to his economic reforms taking effect.

So notwithstanding the “sermon on the mount” by the ‘New Delhi Dream Team’, the impact will surely be seen in Indian market and we are bound to see some turbulence. It is too bad that our learned FMs are repeatedly caught on the wrong foot. But now the only thing the economists worldwide and in India (at least privately) are debating is the degree of impact.