Written By Nischal Srinivasan (Grade 12)
Around ten years ago, India became embroiled in one of its most high-profile corruption incidents in history, widely referred to as the 2G Scandal. This shady affair revolved around how the Indian administration allocated permissions to telecoms firms for utilizing a technology called 2G, utilized for providing cell phone and web browsing services.
Initially, understanding the complexities of this scandal was difficult for many because the process of awarding licenses included difficult mechanisms. Yet, the tide of opinion shifted when the Comptroller and Auditor General of India (CAG), a government entity responsible for analysing monetary issues, released a report. This report unveiled that the way in which the licenses were handed out caused the state to experience a staggering financial loss of around Rs. 1.76 lakh crore.
Here are the primary issues at the heart of this scandal:
The government dispensed licenses to telecom companies at a remarkably low cost. In consequence, the government was not recompensed the same amount of money for these valuable licenses. Several businesses that obtained these licenses were not qualified to procure them. They withheld critical material, gave incomplete particulars, and even produced counterfeit records. Following the procurement of these permits, some firms sold aspects of their operations to other organisations for sizable sums. This money should implicitly have gone to the government, but didn’t.
The authorities in charge of distributing the licenses frequently adjusted regulations to benefit particular organizations. They further heightened the level of unfairness by adopting a “First Come First Served” approach that was overtly prejudiced and utilised outdated fees as opposed to prevailing market values.
Moreover, the then Telecom Minister Raja disregarded suggestions from other government offices that alerted him to the fact his activities were not in the best interests of the public. Raja served as the Telecom Minister during the time when the 2G Scam occurred. He was at the core of the debate due to supposed violations of the laws administering the allocation of 2G spectrum privileges to particular telecom operators. Rumours swirled that Raja had bent these regulations in return for monetary incentives, with hints of bribery and dishonesty linked to his decisions.
Raja has been severely criticized for sanctioning the procurement of 2G licenses by a number of telecom operators at a fraction of their actual worth. This has resulted in a considerable amount of financial harm inflicted on the public purse. Reports have also indicated that the former Communications minister took steps to expedite the licensing procedure, leading to reasonable suspicions of misconduct.
Furthermore, it was suggested that Raja accepted bribes and illegal payments from enterprises that gained from the designation of the licences. A remarkable component of the controversy was the linkage between Raja and Shahid Balwa from Swan Telecom, accused of investing a considerable sum of money into Kalaignar TV Pvt Ltd, a television station affiliated to members of the DMK, Raja’s political group. This caused anxieties about a likely swap between Raja and Balwa, wherein the receipt of advantageous telecom licenses was traded for financial backing to the TV station.
The issue of M. Karunanidhi, a well-known political leader and leader of the DMK, figured prominently in the 2G Scam. She was apparently involved in Kalaignar TV Pvt Ltd, which was under scrutiny over supposed fiscal transactions linked to the scandal. Specifically, Karunanidhi was charged with participating in a plot to securely pass a 2.17 billion-rupee bribe from Swan Telecom to Kalaignar TV. This sparked speculation that the funds granted to the TV network were linked to the preferential handling of the media section of the DMK party.
The repercussions of the 2G Scam were substantial. The Supreme Court of India nullified all 122 licenses granted in 2008 and ruled that the allocation of such essential resources should take place by way of fair auctions. Telecom companies implicated in the scam were subject to fines. This scandal also had a profound impact on the government and is believed to be one of the factors contributing to the defeat of the ruling party in the 2014 elections.
In a nutshell, the 2G Scam was a tremendous corruption commotion in India which focused on the manipulation of 2G spectrum permits. Multiple aspects of shady deals, complaints of payoffs, and substantial consequences for the nation’s politics and telecommunications sector were all part of this episode.
Featured Image Courtesy – Daily Jag