Wednesday, February 1, 2012

SC to rule on two important 2G matters today….

The TOI reports that the Supreme Court is likely to rule on two important matters today. The first one is on whether Chidambaram should be prosecuted for his “involvement” in the decision that Raja took on pricing of 2G spectrum in 2008. The second one is on Prashant Bhushan’s plea that all licenses allotted by Raja in 2008 should be cancelled. Both are important enough to be discussed in detail – yet as usual, both are being seen as political developments more than anything else.

Let’s look at the first point first. Was Chidambaram involved in the decision to give 2G spectrum free? My gut tells me “of course”. How could he not have been consulted? There was a formal cabinet decision taken by the previous government that pricing of spectrum should be decided by the Telecom and Finance ministers together. It is my belief in fact that the entire cabinet was involved in the decision making on this big-ticket item. Chidambaram has indicated that he preferred to auction the spectrum; Raja felt it should be given free as in the past (free means bundled with the one time entry fee). The matter would surely have been discussed in cabinet; the PM would perhaps have taken the final call since his two ministers had differing viewpoints. What’s so surprising about this? What’s surprising is that the Congress developed such cold feet after the CAG report that it made silly attempts to disown its decision. A right decision mind you, as I argued in my post yesterday. Kapil Sibal did make one feeble attempt to justify the policy, but the politicized attacks on him by media and others made him pipe down.

So what happens if the SC allows prosecution of Chidambaram? To my mind, nothing. Yes, it would be embarrassing for Chidambaram….and to the Government that one of its seniormost ministers is being prosecuted. But the mere act of prosecution doesn’t make Chidambaram guilty. Like the mere prosecution of Yeddy hasn’t made him guilty yet; nor the prosecution of Modi will if it is permitted. The SC would be right in allowing the prosecution if it found evidence that Chidambaram was indeed involved in the decision to give the spectrum free. Like I have said, it is obvious that he was. And so there will be no surprise if the SC allows his prosecution. The political ramification of this will be huge. The media – as usual sans any understanding of the matter – will project Chidambaram as having been “convicted” – when in fact, he would only be prosecuted. Many will argue that even the allowing of prosecution meant that “there must be something wrong”. How convenient to the Congress’s political opponents.

I think the Chidambaam prosecution will finally force the government to accept that it voluntarily chose to give 2G spectrum free. It was a political decision and it took it after much thought. There is no reason to be shy of it. The free spectrum was like a subsidy for the development of the telecom infrastructure in the country – to increase mobile penetration so that even the poorest sections of the population could be empowered by this revolutionary produt. The 2g spectrum subsidy was just as much as the subsidy borne by the government in constructing free roads or giving diesel, kerosene and LPG cheap is. Or in giving foodgrains cheap to the BPL families. The Government was right in equating telephony as a basic requirement of the people – as much as the requirement for education and food.

The second point is about canceling the 2G licenses doled out by Raja. The decision here should be easy enough. If there has been a violation in the policy, the licenses should be canceled. But if there hasn’t been a violation, the allottees should be allowed to continue operations. In a few cases, it appears that Raja did show favoritism to some telcos – those licenses should be dealt with as per the policy itself (there would be clauses on misrepresentations etc). If there is nothing wrong, the pall of uncertainty around the new telcos should be lifted. The SC should end this particular case with its verdict today. The multitude of legal cases and the uncertainty in policy making around the sector has cast a shadow on its future outlook. That needs to be dealt with forthwith.

The bigger impact of the two decisions will of course be on the politics of the UP elections. And that is why there is so much anticipation about the whole matter. There’s a world of a difference between the judgment coming now before the elections and coming later after the elections have ended. Should Chidambaram be prosecuted, Congress’s opposition in UP will project it as a conviction. The facts of the matter will be intentionally blurred so as to portray the Congress as being proved to be involved in the 2G scam. How much impact this will have on the poll results remains to be seen….but in the final stages of an election campaign, such ammunition can only be helpful.

The other impact of Chidambaram’s prosecution will be that the BJP would finally be able to connect the Congress with the 2G scam. So far, it’s only been the DMK that has been directly implicated. Subramaniam Swamy is only a surrogate for the BJP – he has himself announced that he’s joining the BJP. Prashant Bhushan’s disaffection with the Congress is well known.

The real truth is that Chidambaram’s prosecution will not be proof of his involvement. It will surely be an irritant to him. He will surely be a worried man. He would have liked to be left out of the entire 2G issue. But now he will have to defend himself. The eventual decision of his culpability may take many more years. Maybe Chidambaram’s prosecution will haunt the Congress now in UP; maybe his conviction (if it happens) will haunt the party during the 2014 General elections…..

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