Friday, November 16, 2012

CAG, 2G and 1.76 lakh crore ..

Naturally the people of the country are interested in knowing what happened to the Rs. 1.76 lakh crore loss raised by the Comptroller Auditor General on 2G spectrum sale conducted in 2008. Why the sudden loss of face for the govt and the CAG now ?

Vinod Rai, does he owe an apology to the nation ?
After the 2G spectrum auction conducted by the government recently on SC orders, following the apolitical CAG's political report on 2G spectrum sale in 2008, the central govt was shocked to find that less than one sixteenth of the speculative loss of rs. One lakh seventy six thousand crores, ie rs. 9500 crores, had been raised from auctions.

The reasons for the flop show as evident from the editorial from The Hindu, could be that the same buoyant conditions did not exist in the Economy now as in 2008, moreover the  teledensity had got to 70% perent from 25 percent then, with the consequent average revenue per user (ARPU) falling from approximately Rs 350 to less than Rs 100 now, and it is no more lucrative for telecom companies to bid at 3G rates of 2010, which amassed about Rs. 70,000 crores for the country. There was a time in 2010 when the number of subscribers were growing at a rate of 20 million a month, for the first time, in the past few months we have seen a negative rate of growth in mobile subscribers coming to less tha 10 million subscribers a month.. The country now has almost 900 million mobile subscribers, three times that of US and approximately 10 times that of England, Germany, France etc... Read this link

Times of India editorial goes this way ..

Does CAG owe an apology to the nation ? First Post article..

The big doubt in people's mind is : Has the public of the country been taken for a ride by CAG Vinod Rai when he took political sides or failed to grab the bigger picture of the commercial aspects of technology or the dynamic market forces behind any decison of the government. It is sad that the CAG is trained to work and comment only with accounts and numbers, he has failed to understand technology and its implications.

How can such a person holding a high constitutional post act in an immature fashion and jump the gun in shooting his peurile comments ?

Being an apolitical appointee of the former government was he too eager to show his concern for the country, its people and the party by his immature presumptive reporting of losses to the country, because of an earlier govt policy of spectrum sale and not auction ?

The CAG needs to be given a dressing down by the President  for having acted in great haste and not doing enough homework and not being technically qualified and competent to pass a crucial comment on a technical issue, misleading the people of the country. He gave an impression to the people as being unduly pressurised by some forces. Did he act for the greater common good or just wanted to raise an issue and score points ?

3G technology (moving data at high speeds) cannot be compared to 2G technology as it is more advanced and its commercial repercussions cannot be underestimated. Had he not just looked at the accounts and numbers and taken advice from technical experts, more so done some reading himself on the complex technology and the vast commercial opportunities with moving data at high speeds compared to 2G, CAG would have shown muted enthusiasm and would not have lost his face like now.

What a colossal waste of time, effort of the people because of a CAG who acted with some unknown vested interests ?

Let not such incompetent officers take the people of the country for a ride in future, at least .. !!! His continuing at the position only reinforces the common man's doubt whether political appointees can cling to such crucial constitutional positions in the country after committing such great blunders !!

Let us not belittle the post of CAG for the ill deeds of one man !! In future let not any constitutional figure give political fodder to parties based on incorrect, erroneous, presumptive facts and figures due to the indiligent arrogance and sheer ignorance of the person holding this high post..

As TOI editorial says, let us not waste time pointing fingers at each other. Instead let us work to improve telecom infrastructure and bring transparency in policy implementation. Policy making is government's turf, let not the CAG or courts interfere in them. At most they can point out the flaws and help to rectify them.



  1. NO! I dont think this honest gentleman should resign.. 2G is too late for the market and that is the answer. He exposed rightly.. Maybe the following comments from a NP can explain better..

    GDP growth during first 2G allocation : plus 10%. Inflation rate: 7%. Interest rate: 8% Compare this with GDP rate prevailing at auction : Minus 0.1 % . Inflation rate :plus 10% . Interest rate: plus 18% which is prevailing at 2G auction 4 years later. It does looks like purpose of bringing the GDP down and mindless hiking of the interest rate was only to prove the point that CAG is wrong in its calculation. But then Mr Pandey, Mango people are not just juicing machines. They have eyes and brains. They can see through the Congress party's game. But even then trying to sell a 2 generation old technology in the era of 4G technology was govts own mistake. To ask CAG to resign for that mistake is shameful moronic act.

    After reading your comment I realized what Amir Khan said in the movie 3-idiot about Kareena Kapoor fiancee was soo true. Abhe Ghade if I sell you a chip of 90nm (Intel Pentium Processor) today when we are in 22nm (Intel 3rd Gen i7 processor) technology do you gonna give me same price of the chip which you would have given me 4 to 5 years back. Let me give another example since a donkey like u need more explanation. If I sell you old day Nokia phone which on those days use to sold for Rs 20,000 will you give me same price today. In technology industry you need to consider depreciation. Why any company will invest in 2 Gen when very soon India will be go towards 4G technology and currently most of the big player have 3G technology.

  2. irish (Delhi) says:
    November 15,2012 at 04:05 PM IST
    My dear blogger, without knowing facts you jump to conclusion, this shows shallowness in your thinking. I will tell you few points: 1) at the time of earlier allotment there were around 512 bidders, now only 8-9 bidders, this shows our Govt's credibility has gone down in the eyes of foreign bidders, 2) only part of portion of entire 2G spectrum was kept for auction, why. This has been emerged in TV debates which you don't listen. Under these concocted circumstances CAG should continue his efforts to save country from scams.


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