Reliance Jio, Airtel got undue favour: CAG

Ambani firm received benefit of Rs 3,367 cr

The Comptroller and Auditor General (CAG) has indicted Reliance Jio Infocomm and Bharti Airtel.

It has accused both firms of getting undue financial advantage due to deficiencies in policy adopted by the Department of Telecom (DoT) during the UPA regime.

Mukesh Ambani-led Reliance Jio alone got undue advantage of Rs 3,367.29 crore after the DoT allowed it to provide voice-calling facility under the new licensing regime, said the CAG’s report tabled in Parliament on Friday. 

In its Tuesday’s report too, the CAG had raised serious questions over the Petroleum Ministry permitting Reliance Industries to charge a marketing margin on its KG-D6 gas in US dollars and made the exchequer poorer by Rs 201 crore due to urea subsidy payout.

Mukesh-led Reliance Industries Ltd in 2010 acquired Infotel Broadband which had won pan-India wireless access spectrum in auctions. The Broadband Wireless Access (BWA) spectrum can be used for 4G services.

The BWA auction rules allowed firms to use their spectrum to provide services authorised under the licence held by them. Infotel Broadband was granted only the Internet service provider (ISP) licence which did not provide for voice-calling facility.

UPA ministers A Raja, facing cases in 2G scam, as well as Kapil Sibal were holding telecom portfolios from 2010 to 2014. Raja was minister from May 2007 to November 2010. For a day, that is November 15, that year, former prime minister Manmohan Singh was also telecom minister. He was succeeded by Sibal, who looked after the ministry till May 2014.

“Reliance Jio Infocomm Limited (formerly, M/s Infotel) paid UL entry fee of Rs 15 crore and additional migration fee of Rs 1,658 crore in August 2013. This migration, allowed at prices discovered in 2001, resulted in undue advantage of Rs 3,367.29 crore to M/s Reliance Jio Infocomm,” said the CAG report.

The auditor said the auction rules “suffered from deficiencies like absence of financial parameters in the eligibility criteria for bidders, absence of lock-in-provision, disparity in scope of usage of BWA spectrum, lack of intermediate milestones in roll out targets etc.”

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