Shady deal

More spectrum scandals are tumbling out of the government’s cupboard. According to reports, the Indian Space Research Organisation (ISRO) and the BSNL were  involved in dubious deals that caused, or might cause, losses to the exchequer, as in the case of the 2G spectrum allocations. ISRO awarded a contract to a private company, Devas Multimedia, in 2005 by which the company reportedly got access to 70 MHz of scarce S-band spectrum. There was no public bidding. While no hard evidence of corruption has yet surfaced, the potential loss to the exchequer is estimated to be Rs 2 lakh crore. The Comptroller and Auditor-General of India (CAG) is seized of the matter. BSNL appointed franchisees, which are shell companies, to roll out WiMax services without charging any upfront fee though it had itself paid Rs 8,000 crore as upfront fee to the government. The public sector telecom company’s interests suffered in the process.

The ISRO, which is under the Department of Space, has said that its agreement with Devas is under review and steps would be taken to protect the national interest. But there are uncomfortable questions about why such a deal was entered into with a private company, giving away a national resource for a pittance. The Space Commission had recommended in July 2010 that the agreement should be scrapped. The law ministry had also sought its cancellation. There was no action for months to cancel the deal, even when the controversy over the 2G spectrum was raging. The department of space is under the prime minister and so he cannot escape responsibility for the improper deal. The PMO has denied any loss to the exchequer but then why was there a proposal to cancel the deal? The BSNL decision is being scrutinised now.

Even if the ISRO-Devas deal is cancelled, there is the need for an enquiry into the circumstances of the allocation of spectrum to the private company. Spectrum is a scarce national resource and the government and its agencies cannot make arbitrary allocations of it. There should be accepted norms and guidelines which should be strictly followed in the matter. Auctioning of the spectrum for bidders is an efficient and fair method of finding the correct value of the resource. Decisions should not be manipulated or shrouded in secrecy as it happened in the 2G spectrum allocation. Those who violate the law and cause losses to the exchequer should not be spared either.