The 2G spectrum case

Author: Rishika Rai, Amity University Lucknow


Introduction:
The 2G spectrum case, spanning from 2007 to 2017, emerged as a highly significant corruption scandal in India. It exposed alleged irregularities in the allocation of 2G telecom spectrum licenses by the Ministry of Telecommunications, widely perceived as emblematic of the entrenched connections between politics, bureaucracy, and corporate entities. The core of the controversy lay in the loss of public funds resulting from the undervalued allocation of telecom licenses in 2008. This issue brought to light serious questions regarding transparency, accountability, and governance in the distribution of public resources. High-profile political figures, major industrial conglomerates, and senior bureaucrats were implicated in the case, marking a pivotal moment in India’s fight against corruption.


Background:
In 2008, the Department of Telecommunications, operating under the Union Ministry of Communications and Information Technology, granted 122 licenses for 2G mobile networks to various telecom operators. These licenses encompassed significant electromagnetic spectrum, a limited public resource essential for wireless communication. At the time, Telecom Minister A. Raja implemented a “first-come, first-served” approach for distributing these licenses. Notably, the license fees were calculated using 2001 rates, despite substantial growth in the telecom sector by 2008. Consequently, the government only collected ₹9,200 crore for all 122 licenses, considerably less than their anticipated market worth.

Estimated Loss:
In November 2010, the Comptroller and Auditor General of India, led by Vinod Rai, submitted a report to Parliament that estimated a presumptive loss of ₹1.76 lakh crore. This loss was attributed to the undervaluation of 2G spectrum licenses and was calculated by comparing them to market prices from the 3G spectrum auctions of the same year. Although this figure became a focal point in politics and media, some critics suggested that the loss was hypothetical. They argued that there was no clear market mechanism to accurately assess the spectrum’s value in 2008.

Key Allegations and Accused:
The Central Bureau of Investigation has filed charges against 17 individuals and 3 companies, including A. Raja, the former Union Telecom Minister; Kanimozhi Karunanidhi, a DMK MP and daughter of M. Karunanidhi; and Siddharth Behura, the then-Telecom Secretary. Also charged was RK Chandolia, Raja’s private secretary, as well as executives from Unitech Wireless, Reliance Telecom, Swan Telecom, Loop Telecom, and other companies. The primary accusations involve manipulating cut-off dates to benefit specific companies, awarding licenses to unqualified companies, utilizing front companies to circumvent regulations, routing kickbacks through media outlets, criminal conspiracy, forgery, and abusing official positions. The CBI cited sections of the Indian Penal Code and the Prevention of Corruption Act of 1988, including Section 120B, Section 420, and Section 13 of the PC Act.

Supreme Court Intervention:
In a significant decision in February 2012, the Supreme Court of India revoked all 122 2G licenses that had been granted in 2008. The court declared that the first-come, first-served approach was “arbitrary and unconstitutional” and mandated that future spectrum allocations be carried out through open and transparent public auctions. This judgment was viewed as a firm judicial stance against the improper use of executive power in the distribution of public resources.

Trial and Acquittal:
The trial, overseen by Judge O.P. Saini in a Special CBI Court, commenced in 2011 and spanned more than six years. During this period, the prosecution presented over 150 witnesses, submitted extensive documentary evidence, and engaged telecom and financial specialists. Ultimately, on December 21, 2017, the court exonerated all defendants, asserting that the prosecution did not sufficiently substantiate the allegations. Judge Saini noted in his 1,552-page judgment that there was no evidence presented to the court indicating any criminal activity by the accused.

FAQ:

What is the 2G Spectrum Case?
The 2G Spectrum Case is a significant political and financial scandal in India. It concerns the improper and undervalued distribution of 2G telecom spectrum licenses by the government in 2008, which purportedly resulted in a loss to the public treasury.
When did the 2G spectrum allocation happen?
In 2008, during the UPA government headed by Prime Minister Dr. Manmohan Singh, a contentious allocation occurred with A. Raja as the Telecom Minister.
What was the method used for allocating the licenses?
In 2008, licenses were handed out using a first-come, first-served approach with pricing from 2001, despite significant growth in the telecom market.
What was the estimated loss to the government?
The Comptroller and Auditor General’s estimation of a notional loss of ₹1.76 lakh crore because of underpricing has been called into question and considered speculative.


Conclusion:

The 2G spectrum case illustrates the difficulties of substantiating white-collar crime within a legal framework that requires concrete proof. Despite the acquittal, the repercussions for both the public and institutions were extensive, revealing deficiencies in the implementation of public policy, regulatory monitoring, and ethical standards in politics. Irrespective of the trial’s result, this case was instrumental in advocating for improvements in the management of public resources, corporate governance, and legal responsibility in India.