2g spectrum scam case

India found itself in the center of such protests in 2010-2011 over the scam in 2G spectrum allocation to telecom companies. By magnitude of loss to exchequer over US$ 40 billion this scam was reported to be the biggest in democratic India. The scam blurred the ethical lines between corporate houses, corporate lobbyists, journalists, bureaucrats, and politicians. In a nutshell, it showed up one of the worst sides of contemporary capitalism. The 2G scam went a long way to show how the Indian economy, one of the fastest growing in the world, is dominated by a small set of tightly connected power players. Industry observers felt that if not checked soon, the deep-rooted problem of crony capitalism in the country could adversely affect Indias growth and development. They wondered how the accountability could be fixed and the unholy nexus broken. Issues: Analyze and understand the 2G scam that broke out in one of the fastest growing economies of the world Discuss and debate the role played by corporate houses, politicians, etc. in the scam Understand the genesis of crony capitalism, even as capitalism professes free markets Discuss and debate whether corruption is a normal part of business or an economic malaise that needs to be urgently curbed Discuss and debate whether some countries are more corrupt than others Explore ways in which corruption can be discouraged Introduction The Indian telecom sector had witnessed unparalleled growth since the dawn of the new millennium, attracting the attention of Indian as well as global telecom companies. However, in early 2011, several Indian telecom companies were under the scanner for alleged irregularities in grant of licenses and spectrum allocation. In January 2011, The Supreme Court of India issued notices to 11 private telecom companies on charges that they had been granted licenses despite allegedly being ineligible to secure telecom licenses as per regulations or had failed to roll out services within a stipulated time-frame as per regulatory obligations. The telecom companies which were issued notices were Videocon, Loop Telecom, Dishnet Wireless, S-Tel, Uninor, Allianz Infra, Tata Teleservices , Sistema Shyam Teleservices, Idea Cellular, Etisalat (Swan), and Vodafone-Essar. Earlier, in November 2010, the Telecom Regulatory Authority of India (TRAI) had recommended that the government cancel 69 out of the 122 licenses issued during 2008 on the same reasons. The 69 licenses of five companies recommended for cancellation were 20 licenses of Loop Telecom, 15 of Etisalat DB, 11 of Sistema, 10 licenses of Videocon, 8 of Uninor, and 5 licenses of Aircel. The Government of India (GoI) led by Prime Minister Manmohan Singh found itself faced with corruption charges. It was alleged that the Minister of Communications and Information Technology (MCIT), Andimuthu Raja (Raja), had granted telecom operating licenses and allotted spectrum arbitrarily on a First-Come-First-Served basis, paying no heed to advice from the Prime Minister and other ministries that an open auction be held. Across the world, spectrum, which is treated as a scarce natural resource, is generally auctioned and given to the highest bidders, but in

India, the MCIT allocated spectrum to various companies between November 2007 and December 2010 at price levels agreed to in 2001 without any bids being called for. A preliminary report by the Comptroller and Auditor General of India (CAG) , a federal agency for auditing public accounts, computed the loss to the exchequer at around US$40 billion (Rs 1760 billion) due to the MCIT favoring allocation rather than open auctioning. Further, it was also alleged that the MCIT had flouted guidelines and eligibility conditions, altered cut-off dates (for receiving applications), and tweaked procedural conditions, resulting in unfair advantages to certain companies. Following the allegations, Raja was forced to step down from the MCIT and in 2011, was facing corruption charges. The Supreme Court of India, in December 2010, stated that it was prima facie satisfied that irregularities had been committed in the allocation of 2G spectrum by Raja. The Court also ordered the Central Bureau of Investigation (CBI) to conduct a comprehensive investigation to bring the wrong-doers to justice.