In a scathing criticism of former Telecom Minister A Raja for favouring industrial houses including Anil Ambani group, government auditor CAG today said he alloted spectrum ignoring the Prime Minister's advice and caused a loss of Rs 1.76 lakh crore.

CAG said that the entire process of allocation of Unified Access Service licences "lacked transparency" and was undertaken in an "arbitrary, unfair and inequitable manner", in the process "flouting every canon of financial propriety, rules and procedures.

The auditor has pegged revenue loss on account of new licences at up to Rs 1.40 lakh crore and that on account of additional spectrum allotment to the existing operators at Rs 36,993 crore. The 77-page report of CAG, tabled in Parliament, said that due diligence was not followed and even the recommendations of the telecom regulator TRAI were "not followed in spirit.

The report said the "presumptive" loss caused to the exchequer through spectrum allocation to 122 licensees and 35 dual technology licences in 2007-08 was Rs 1,76,645 crore. It arrived at the figure on the basis of 3G auction held earlier this year in which the government mopped up over Rs 67,000 crore.

It said there was an "imperative need to fix responsibility and enforce accountability for the lapses highlighted in the audit report." Elaborating on the lapses and irregularities, the government auditor said Prime Minister Manmohan Singh had "stressed on the need for a fair and transparent allocation of spectrum" while the Ministry of Finance had sought for the decision regarding spectrum pricing to be considered by an EGoM (Empowered Group of Ministers).

Brushing aside their concerns and advices, the Department of Telecommunications, in 2008, proceeded to issue 122 new licences for 2G spectrum at 2001 prices, by flouting every canon of financial propriety, rules and procedures," the CAG said. The DoT also did not do the requisite due diligence in the examination of the applications submitted for the licences, leading to the grant of 85 out of 122 licences to the "ineligible applicants" as all these firms did not have stipulated paid-up capital at the time of application.

Further, 45 out of 85 licensees were issued to companies which failed to satisfy conditions of main object clause in the memorandum of Association (MoA), it said. The CAG said the process of giving dual technology licences to leading telecom firms including Reliance Communications and Tata Teleservices "lacked transparency and fairness", and equal opportunity was denied to other similarly placed operators who could apply for use of dual technology only after formal announcement of the policy. PTI 161110

Black money trail: India drained of Rs 20 Lakh crore during 1948-2001 says a study

A new study by an international watchdog on the illicit flight of money from the country, perhaps the first ever attempt at shedding light on a subject steeped in secrecy, concludes that India has been drained of $462 billion (Rs 20,556,848,000,000 or over Rs 20 lakh crore) between 1948 and 2008.

The amount is nearly 40% of India’s gross domestic product, and nearly 12 times the size of the estimated loss to the government because of the 2G spectrum scam . The study has been authored by Dev Kar, a lead economist with the US-based Global Financial Integrity, a non-profit research body that has long crusaded against illegal capital flight.

Mr Kar, a former senior economist with the International Monetary Fund, says illicit financial flows out of India have grown at 11.5% a year, debunking a popular notion that economic reforms that began nearly two decades ago had tempered the creation and stashing away of black money overseas.

Outflows accelerated after reforms

If capital outflows were a child of the independence era, the problem came of age in the years after the reforms kicked in. Nearly 50% of the total illegal outflows occurred since 1991. Around a third of the money exited the country between 2000 and 2008. 8 Nov, 2010, 06, Binoy Prabhakar,ET Bureau

India is being hailed as a rising global economic power. However, given its poor record in poverty eradication, human development indicators and inclusive growth, it has yet to go a long way to achieve this reputation.

The biggest impediment is the cancer of corruption, which has now spread to every wing of the government and every section of society, including the noble professions of education, medicine, judiciary, armed forces and journalism.

The several shameful episodes that have come to light in recent times include reports of illegal mining in several States, the 2G spectrum licences scandal linked to Telecom Minister Mr D. Raja, and the Sukhna land scandal involving four Lieutenant Generals of the Indian army.

The scams relating to the recently held Commonwealth Games and the Adarsh Co-operative Housing Society in South Mumbai have resulted in the sacking of Mr Suresh Kalmadi from his party position and Maharashtra Chief Minister Mr Ashokrao Chavan respectively.

GROWING GRAFT

Corruption has become a way of life today, and everyone takes it for granted. Politicians and government officials shamelessly appropriate even the welfare funds meant for the poor.

Large-scale corruption and leakages in the plethora of anti-poverty schemes launched over the past several decades have defeated the very purpose of those schemes.

The public distribution system (PDS) intended to supply food grains and other essential items to the poor and weaker sections is in a shambles owing to large-scale diversion to the open markets and even to neighbouring countries like Nepal.

Similar is the case with the National Rural Employment Guarantee Scheme (NREGS), the UPA Government's flagship anti-poverty scheme. A Government investigation in 2009 revealed that a whopping 40 per cent of the allocation from the budgeted Rs 40,000 crore had been siphoned off.

The office of the Comptroller and Auditor General (CAG) routinely exposes serious cases of corruption in many Government schemes and programmes. However, corrective action from the Government is rare.

With rising population pressures, particularly in the bigger cities, there is widespread corruption in the real estate business with a thriving land mafia-politician nexus involved in illegally grabbing government land and land reserved for recreation parks, playgrounds and so on. As the eminent economist Raghuram Rajan aptly put it: Yesterday's licence-permit raj has morphed into a land mafia raj with huge socioeconomic costs for the country.

Unfortunately, the discretionary allotment of land for housing to certain powerful groups has almost become institutionalised owing to the criminalisation of politics.

Land scarcity for affordable housing in major cities has been accentuated by the fact that the armed forces, railways and the PSUs hold land far in excess of their operational needs and reasonable reserves. For instance, it has now come to light that the Ministry of Defence holds about 17 lakh hectares of prime land across the country worth more than Rs 20 lakh crore. Of this, only about two lakh acres are reportedly in use.

Clearly, there is need for a detailed and competent audit of the land banks held by the country's defence forces, port trusts, railways, the PSUs and other public utilities. The excess land held by them should be released for public housing, educational institutions and so on.

Fighting corruption and cleaning the prevailing mess should receive top priority if the Government is to realise its goal of inclusive growth and poverty eradication to create a new 21 st century India over the next decade or two.

The cleaning process should begin at the top by drastically reforming the electoral process. Excessive, illegal and illegitimate expenditure in elections is the root cause of corruption. Often, the poll expenditure of candidates is 10 to 15 times the legal ceiling prescribed, eventually leading to criminalisation of politics that threatens the very roots of democracy.

In July 2008, The Washington Post had reported that nearly a fourth of 540 Indian Parliament members faced criminal charges, including human trafficking, immigration rackets, embezzlement, rape and even murder. At the State level, things are worse.

According to the Swiss Banking Association Report 2006, Indians had stashed away $1,456 billion of black money in that country. The corrupt entities include politicians, industrialists, officials, cricketers, film stars, and protected wildlife operators, to name just a few.

Although the Right to Information (RTI) legislation has empowered citizens to demand transparency from public officials, there have been instances of RTI activists being threatened, attacked and even killed by vested interests.

Hence, there is a need to drastically change our legal system to guarantee stringent punishment for corrupt politicians and government officials.

Asking a corrupt politician to resign from the job is not enough; criminal proceedings should follow to deliver suitable punishment, including a jail term. B L:12/11/2010

The rankings, on a scale of 0 to 10, are based on the extent of corruption and each government's ability to punish and contain corrupt activities, among other criteria.  A score of zero is perceived to be highly corrupt while 10 would indicate the lowest level of corruption.

With an integrity score of 3.3, India is now ranked 87th in the world in terms of corruption. Neighbouring China is ahead of India in the list at 78th place, with a score of 3.5. It was at 79th position in 2009.

India has gone down in the ranking as well as integrity score and this is a matter of concern and regret. It appears that the level of governance has not improved despite India having a skilled set of administrators," Transparency International India Chairman P S Bawa said here.

According to the report: "The perception about corruption in India seems to have increased primarily due to alleged corrupt practices in the recently held Commonwealth Games (CWG) in Delhi.

The world's largest economy, the USA, garnered an integrity score of 7.1 and was 22nd in the list. P T I /10 Oct27