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Hurry up

Last Updated 02 December 2010, 17:26 IST

Union telecom minister Kapil Sibal’s move to initiate proceedings against companies involved in the 2G spectrum scandal is welcome, if it leads to decisive action against the errant companies. Sibal has announced that show-cause notices were being issued to 85  companies which secured their licences fraudulently on a first-come-first-served basis through misrepresentation and in violation of the terms and conditions. There are also 119 companies which have not met their roll-out obligations. The warning that their failure to launch operations within an year might lead to cancellation of the licences is also welcome. Strong penal action is needed against companies seeking return of their licence fee or permission to sell their licences to existing telecom companies.

The action plan, as announced by the minister, also includes reference of the case of Swan telecom, which is alleged to be a front company of a telecom major, to the ministry of company affairs and proper calculation of the real value of the spectrum allocated to the errant companies so that the loss to the exchequer can be assessed.  The plan at present is only a statement of intent and it should be followed up sincerely. Considering the huge amounts of money involved and the political dimension of the scandal, it is likely that there will be pressures to go slow on the action. There may even be arguments that strong action might harm the business environment by deterring future investment. These are untenable. It is failure to enforce the law that will harm the business and investment climate.

The record of the government in taking corrective action in such cases does not inspire confidence. The claimed determination mellows down and the pace slackens after the initial din dies down.  There are already doubts about the need to give 60 days’ time for reply to companies which are being served show-cause notices. The minister has promised a crackdown and the government should realise that its credibility is at stake in dealing with the scam. The bottom line should be the recovery of the money lost to the exchequer and punishment for those who were responsible for it. The process of remedial action that has now been announced need not be linked to the dispute over the type of investigation that is needed to unravel the scam. There is enough evidence of wrongdoing to haul up those who have resorted to it.

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(Published 02 December 2010, 17:26 IST)

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