Another scam in India - Praful Bidwai - Monday, February 21, 2011

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Just as India’s United Progressive Alliance government seems set, awkwardly and belatedly, to concede the demand for a Joint Parliamentary Committee on the 2G-telecom spectrum scam, another scandal has broken out, involving the prestigious Indian Space Research Organisation (ISRO) and a private company, Devas Multimedia.

ISRO subsidiary Antrix Corporation grossly undersold to Devas spectrum from the 2.5 gigahertz (GHz) frequency band called S-band. The sale of 70 megahertz (MHz) of spectrum would have caused a presumptive loss to the exchequer of Rs20,000 billion. This exceeds the damage inflicted by the 2G-scam, estimated by the Comptroller and Auditor General of India (CAG), at Rs17,000 billion.

ISRO, long lionised for launching many rockets and satellites, now joins other Indian science and technology institutions of dubious integrity which hide behind technical “expertise” and abuse their power. On top of the list are the Department of Atomic Energy and the Defence Research and Development Organisation, which are pampered with $1 billion-plus budgets, but have never completed a project on time and without huge cost overruns.

ISRO has performed better than the DAE, but follows the same organisational model. Devas was floated by former ISRO executives, who exploited their contacts in Antrix to drive a skewed bargain.

ISRO was to design, build and launch two S-band spectrum satellites for Devas to offer a range of commercial multimedia broadband services across India. The CAG estimates the value of the spectrum at over $44 billion. Devas was to pay Antrix just $260 million for this.

No wonder Devas earned a premium of Rs114,000 on each of its Rs10 shares (on face value, that is) when it sold 17 percent of its equity to Deutsche Telekom in 2008!

The key here is the S-band. According to a telecom industry report, the S-band is unique: “As mobile voice and data traffic increases, wireless operators around the world will require additional spectrum. However, ...few bands remain available for new allocation to mobile wireless services... The 2.6 GHz band is one exception. ... [It] provides an opportunity to meet rapidly rising demand for capacity to deliver mobile broadband services on a widespread, common basis across the world.”

ISRO was aware of the spectrum’s worth. But it didn’t inform the Union cabinet, the Department of Telecommunications or the Telecom Regulatory Authority of India about the deal. An insider blew the whistle on it in late 2009 and the truth came out gradually. Like in the 2G scam, the S-band spectrum sale was also made without competitive bidding. But in this case, ISRO scientists became salesmen and suppliers to their own organisation and took it for a ride.

Apart from causing a huge financial loss, the Antrix-Devas deal would have robbed many Indian public organisations of access to spectrum, including the defence services, paramilitary forces, the Coast Guard and Indian Railways, all of which had pitched for spectrum within the S-band for various purposes, including strategic communications and tracking trains.

Devas would have sold/leased the spectrum for high-definition television broadcasting, telecom services, mobile TV, broadband Internet, and navigation, to make a killing. The S-band spectrum would have appreciated in value, as it’s virtually the only band left from which a substantial chunk of spectrum can be allocated to telecom companies.

ISRO compounded its malfeasance by trying to bury the report of a one-man Department of Space committee which inquired into the Devas-Antrix deal. ISRO overruled the committee’s mid-2010 recommendation to annul the contract and airbrushed the various irregularities revealed.

ISRO is now in the dock. The UPA too has brought no credit to itself by appointing a committee to investigate the contract, consisting of former cabinet secretary B K Chaturvedi and Roddam Narasimha, member of the Space Commission, the policy-making body of the DoS.

Chaturvedi was a member of the commission by virtue of being the cabinet secretary, and had approved the deal. Narasimha’s too is a case of conflict of interest.

This is the latest in an unending series of scams, including the Commonwealth Games, Adarsh Housing, the 2G-spectrum and money-laundering scandals, which have revolted the public and damaged the UPA’s credibility.

Prime Minister Manmohan Singh could have partially restored the credibility had he sacked tainted ministers such as Vilasrao Deshmukh, Kamal Nath and Praful Patel, as he did with Telecom Minister A Raja.

In the latest reshuffle, Singh elevated Deshmukh to Rural Development, a ministry with a huge budget which ought to be used for the benefit of the poor. The same man had been indicted for shielding loan-sharks who have driven farmers to suicide in his home state (Maharashtra). He was removed as its chief minister. This shows deep cynicism. Merits apart, the UPA lost a course-correction opportunity.

The UPA government has failed to provide the public relief from rising prices, in particular high food prices, while parroting homilies about how inflation will level off, by October, November, January... People are relieved that onion prices have at last fallen. But Agriculture Minister Sharad Pawar’s first reaction is to allow onion exports, although recent exports of onion and grain were a major cause of the domestic price rise.

Exporting an annual average of 7.9 million tonnes of food grains in recent years wasn’t wise. But no lessons were learnt. Why should they be learnt when there’s a chance to make an illegal 10 per cent on exports?

Meanwhile, the UPA continues to pursue pro-rich, pro-corporate policies while illegally imposing destructive and predatory industry, mining and dam projects on the poor.

The UPA came to power by pledging a commitment to inclusive growth and equity. It reconstituted the National Advisory Council under Sonia Gandhi to help formulate policies and programmes that would provide India’s disadvantaged people food security, basic healthcare, right to education and other amenities.

The NAC is meant to be fully autonomous. But the government is messing with it. Singh first asked the NAC to shed its insistence on a universal public distribution system for food security. The NAC formulated a two-tier structure of entitlements and prices to cover 90 per cent of the rural population and 50 per cent of city-dwellers.

But Singh wasn’t satisfied. He appointed another committee to scuttle the whole plan of giving affordable food to underprivileged Indians.

The government also rejected the NAC’s demand that work under the National Rural Employment Guarantee Act should be paid the statutory minimum wage! This violates several Supreme Court injunctions which say the minimum wage must be paid “in any event.” It’s “the lowest limit below which wages cannot be allowed to sink in all humanity.” Paying lower wages amounts to “forced labour.”

Singh quibbles over a few billions for the poor, but has no compunctions in giving away Rs50,000 billion in tax breaks and subsidies to corporations. This is a dangerous trend.

If the UPA continues to be so partisan towards the rich and ignore the poor majority, it will forfeit its legitimacy in the eyes of the people and invite their wrath—the way the National Democratic Alliance did via its “India Shining” campaign in 2004.

As parliament’s crucial budget session begins, the UPA has a major chance to correct course. If it wastes it, it risks disaster.

The writer, a former newspaper editor, is a researcher and peace and human-rights activist based in Delhi. Email: prafulbidwai1@

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