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CAG audit: Telecom lobby's protests may not work

Shaji Vikraman

THE winds of change are slowly blowing across Sanchar Bhavan, which houses the Ministry of Telecommunications and its carved up operations outfit -- the corporatised Bharat Sanchar Nigam Ltd (BSNL).

After the messy battle with the private sector players in the telecom sector for well over two years, mainly over the issue of licence fees, besides the controversy over the disinvestment in VSNL, the Department of Telecommunications (DoT) has now reluct antly agreed to allow the Comptroller and Auditor General (CAG) to audit the revenue statements of all the players in the telecom business.

Life may never be the same now for these private players, who have got away with the blue murder so far, thanks to their dubious methods of lobbying.

This after DoT officials dug their heels in on the demand for a CAG audit of the revenue statements of all telecom players for quite a while.

The dithering over this demand by the department does not cause any surprise after the famous CAG report on the opening up of the telecom sector. The report had slammed the DoT for virtually abetting the private telecom players.

The CAG has been pushing for an audit for good reasons. In the licence fee regime, the estimates obviously were based on the fee each player was supposed to pay after the bidding. So, in 2000-01, the Budget estimate for licence fees for the basic and cel lular services and also licence fees from the State-owned VSNL, MTNL and BSNL was a modest figure of Rs 1,527.10 crore.

The figure is obviously low as in one of the disgraceful acts over the last few decades, the private corporate sector in India managed to armtwist the Government into waiving the licence fees and move towards a revenue-sharing arrangement in August 1999.

One lobby in the telecom sector then came up with a figure of Rs 60,000 crore, which according to it was the revenue bonanza that the Government lost out due to the transition to a new arrangement.

The largesse for the telecom sector did not end then. Although the Government had to sacrifice one of its most `flamboyant' officers from the Prime Minister's Office (PMO) for his alleged role in the telecom affair, Mr N.K. Singh, the cellular lobby got a further boost with the paring of the revenue share from 17 per cent to 12 per cent and below depending on the circles.

In an impressive show of alacrity which seems to be missing when it comes to paying up licence fees or fulfilling contractual agreements, the basic services lobby came up with a figure for this giveaway also. The exchequer lost out on Rs 4,500 crore, the lobby pronounced.

The change in policy now to permit the CAG to move in and audit the revenue figures of the predominantly private players in the telecom sector is certain to ruffle them. Since the receipts to the Government are now pegged at 12 per cent of the revenue, G overnment officials reckon that some of these players can be expected to be at their creative best on the accounting and business front.

This will be what the CAG will be on the lookout for, one would assume.

They also expect these ``champions of competition'' to whine again and enact yet another show of petulance at this change of policy. However, this time around, the telecom lobby's protestations may not work considering that the lobby's ``flamboyant frien d'' is grounded and that putting off the CAG on this issue for long may backfire on the Government.