2G Math: A look at the numbers that trapped Raja
New Delhi: Even though the amount of loss in the award of 2G spectrum has been widely quoted by the media at Rs.1.76 lakh crore (nearly $40 billion), India's official auditor not only gives a set of other lower figures but says all these are at best 'presumptive' without any resort to mathematical or econometric model.
Any loss ascertained while attempting to value the 2G spectrum allocated to 122 licencees in 2008 can only be presumptive given that there are varied determinants, says the Comptroller and Auditor General of India in its report tabled in parliament.
These determinants that could have a potential bearing on the price of spectrum include scarcity value of spectrum, nature of competition, business plans, number of operators, growth, market situation, says the report.
"Instead, of attempting to come to a specific value of 2G spectrum, which could have been possible only through an efficient market discovery process, we have looked at various indicators to assess a possible value, from the records made available to audit, rather than mathematical/econometric models."
The various presumptive figures given by the auditor are:
a) Rs 65,909 crore - This is the value for 122 new licences and 35 others for dual-use technology based on price offered by Stel in November 2007 in a letter to Prime Minister Manmohan Singh.
b) Rs 1.52 lakh crore -This is the value for 122 new licences and 35 others for dual-use technology based on recommendations of the telecom watchdog, which said it was fair to compare 2G spectrum with that for 3G telephony.
c) Rs 58,000 crore to Rs.68,000 crore - This is the value for 122 new licences and 35 others for dual-use technology based on the premium which some new companies were able to attract from their foreign investors as foreign investment.
In the 96-page report including annexures tabled in parliament, the official auditor sought to spell out what it felt was the potential loss to the exchequer in 2G spectrum allocation in 2007-08 due to policies followed by then communications minister A Raja.
"The entire process of spectrum allocation was undertaken in an arbitrary manner," said the report, adding the estimate of loss was based on various parameters - without any mathematical or econometric models - and presumptive in nature.
The issue has been simmering for over two years and after adamantly refusing to resign, saying he had done no wrong, Raja quit his cabinet post late on Sunday night over the spectrum controversy, ending an opposition-Congress standoff that, however, continues to paralyse parliament.
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