Finance Ministry's note in conflict with Pranab Mukherjee's response to CAG

NEW DELHI: The 'civil war' in the government is certain to intensify as the Finance Ministry’s note to the PMO on 2G spectrum allocation is unlikely to go unchallenged.

Sources in the government said the Finance Ministry’s claim that the policy was steered by then telecom minister A Raja and then finance minister P Chidambaram will not pass muster as it is in conflict with Finance Minister Pranab Mukherjee’s own response to the draft CAG report on spectrum allocation.

“MoF concurred with the audit that the assumption of DoT to the effect that spectrum pricing was within its normal work allocation was not tenable.

The MoF observed that... in regard to the fixation of entry fees for new licensees, prudent principles of governance would have required the DoT to engage in further interministerial discussions particularly with MoF, The fact that this was not done despite repeated advice from MoF does give scope for creation of doubt, on the vailidity of the decision taken to fix the entry fee for new licences at 2001 levels,” read comments from Mukherjee to CAG.

Sources also pointed out that Chidambaram, between May 2005 and January 9, 2008, “consistently suggested that entry fee should be revised and that the auction methodology should be adopted.

But Prime Minister Manmohan Singh, at a meeting chaired by him on June 4, 2008, decided to update the entry fee of Rs 1,650 crore. Singh has been consistently defending this decision of his government.

Both Singh and Telecom Minister Kapil Sibal had defended, inside and outside Parliament, the entry fee of Rs 1.650 crore and the first-come-firstserved methodology as “correct and intended to serve the objective of speading telecommunications and keeping tariffs low”.

Similarly Raja cannot be blamed for keeping the spectrum pricing out of the purview of the group of ministers as the terms of reference was amended with the approval of the Prime Minister.