Lok Satta

Tuesday, 16 November 2010 12:07

Lok Satta approaching Supreme Court to seek cancellation of 2-G licenses

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As part of its multi-pronged fight against ubiquitous and monumental corruption, the Lok Satta Party will be approaching the Supreme Court to get the corruption-tainted 2-G spectrum licenses cancelled and licenses issued afresh on competitive bidding.

 

The Lok Satta will implead itself as a party in the case filed by the Center for Public Interest Litigation in the Supreme Court or a file fresh petition if necessary on the 2-G spectrum scam, said party President Dr. Jayaprakash Narayan in a media statement here today.

 

He said that the revelation of Tata Group Chairman Ratan Tata that the Tatas kept away from aviation business as it was not prepared to oblige a Minister with a Rs.15-crore bribe once again underlined the need for institutional mechanisms to prevent corruption.

 

 Dr. JP said that most of the debates in the media and political circles missed the forest by focusing on trees like the future of Mr. A. Raja, the guilty Minister, the alliance between the Congress and the DMK and the nature of the inquiry that should be instituted.

 

The terrible scandal offers a priceless opportunity to cleanse the political system of corruption, said Dr. JP and outlined the ways and means of going about it.

 

There can be no two opinions on the fact of massive corruption in the 2-G spectrum allocation as the Telecom Minister and some bureaucrats have been caught with the smoking gun. Allocation of precious and finite spectrum on a first-come, first-served basis without calling for competitive bids, arbitrary advancement of the cut-off date for considering applications, fixing an abnormally low price for the spectrum disregarding the remarkable increase in telephone density in the country, failure to lay down eligibility criteria for applicants and sale of cornered spectrum by fly-by-night operators for many times the fee they paid the Government had caused enormous loss running into tens of thousands of crores of rupees to the public exchequer.

 

Dr. JP demanded that the 2-G licenses granted by Mr. Raja be straightway annulled under Section 23 of the Indian Contracts Act. A contract as per the Act becomes void if it is tainted with corruption. The Government could return the license fee to the spectrum licenses after deducting fee for the period they used it. The Government should then call for international competitive bidding after laying down transparent eligibility criteria in consultation with TRAI (Telecom Regulatory Authority of India).

 

To prevent recurrence of such scams in future, the Government should enact a law under which any license for or lease of natural resources by the Government to corporates shall become void if there is evidence of corruption/fraud/collusion/loss to the Government. The fear of losing licenses/leases obtained with illegal money will deter corporates from indulging in corruption.

 

Dr. JP said that a second law be enacted immediately providing for stiff taxation of windfall profits earned by corporates because of the monopoly enjoyed by them in the exploitation of natural resources the Government allocated them either because of monopoly or a change in the global economic environment. The British Government enacted such a law in 1997, when some British companies earned abnormal profits by striking oil in the North Sea and the oil price skyrocketed. The companies that cornered the 2-G spectrum licenses through questionable means and sold them within weeks for astronomical sums should be subjected to the proposed windfall profits tax.

 

Dr. JP suggested enactment of another law on the lines of the False Claims Act in the U. S. If the exchequer incurs any loss because of fraud or misrepresentation or violation of the due process as determined by an independent, competent authority, the guilty had to pay a civil penalty equivalent to three to five times the loss sustained. The U. S. Government had collected USD10 billion under the Act.

 

 Dr. JP appealed to all political parties to utilize the opportunity provided by Mr. Raja to devise institutional mechanisms for mitigating, if not eliminating corruption. India’s GDP (gross domestic product) would go up by about two percent straightway, if only corruption could be curbed, he added.