2G scam: PM smelled something fishy but stayed away, says Arun Shourie

Source: ET

Former telecom minister A Raja's statements in court has opened a new political battlefront, withBJP demanding the resignation of the Prime Minister and P Chidambaram, who was finance minister when the 2G spectrum allocation was made. The telecom minister during the NDA regime, Arun Shourie , has been tracking developments on the 2G trial. In an interview to ET , Shourie discusses what he believes the PM knew, going by the file notings, Raja's defence that he inherited the policy, and other related issues. Excerpts:

Are you inclined to believe Raja's statements that he did everything with FM's and PM's knowledge?

Raja was very clever. He wrote about 18 letters to the PM during the 2G episode. And in each letter, he implicated somebody. For instance in his letter on 7 November, 2008, he says, "kindly recall my meeting with you on 4/11/2008 along with the honourable Finance Minister in connection with3G spectrum auction and one time spectrum charges for 2G. During the discussion, you advised me to meet the press, to explain the policy and rules.

Accordingly, I addressed the issues in the press conference today and explained the related issues including the dilution of shares as explained by the Finance Minister, of Swan and Unitech." The same day he issues a press release, in which he repeats that this issue has been explained by the Finance Minister. "This matter has been discussed and clarified with the Finance Minister," the press release says, in which this portion is in bold!

Then the FM himself has said, yes, the PM asked me to examine this particular matter. He says I examined it, I said it is dilution of equity and it was consistent with policy and procedure. If that is the case, how is it that now, the Enforcement Directorate, which is under the same ministry, has slapped a 7100 crore penalty on Etisalat? For violation of FEMA!

If everything was done as per policy and procedure, then how? It now transpires, according to ED, that Etisalat was given permission to bring in money from UAE. But it, instead, brought in money from an unknown unit in Mauritius. Secondly, on the same day, Syed Salauddin, a close associate of Mr Karunanidhi, brought in 380 crore. He was allowed to bring it in as a domestic investor and he brought the money from UAE. He has also been slapped with a Fema notice. Both things happened in Swan on the same day.

So, is Raja on firm ground?

All these statements these lawyers like Kapil Sibal are making now, saying everything was in order and there was zero gain to the companies, are statements that will be used by these companies to defend themselves in notices. Kapil Sibal is not the lawyer for the PM, he is the lawyer for Raja and the companies.

It is not Raja who is dragging in the PM now. You go back to Sibal's first press conference on this matter. There he said Raja kept the FM and the PM informed at every turn. I had said at that time that this is the sentence that Raja will use. That is exactly what has happened. Now you wait and see. When the Telecom Minister says the companies made no gain, that will be their defence.

The PM had said in Parliament in February that the then FM and Raja had agreed on a formula and this was communicated to him. Raja says the equity dilution inSwan Telecom and Unitech was discussed and cleared with the FM before the PM. FM says the PM wanted to know if it was a case of dilution of equity or divestment. This shows that the matter that has caused the most outrage, that these two companies benefitted from enormous valuation for a license they paid the government very little for, was known to the PM and he did nothing about the policy that allowed these companies to do this.

All this is in the public domain. Priority lists have been changed, the basis of first-come-first-served had been changed, cut off date had been advanced and 500 applicants were reduced for favoured companies. It now turns out from the CBI chargesheet that the license applications of three companies were approved even before the policy was announced.

You mean to say rivals would not have brought it to the attention of TKA Nair (Principal Secretary to the PM) and others in the PMO? Do you mean to say the Intelligence Bureau and CBI and others would not have brought this to their attention? I cannot believe that. Because our system is so structured that the PM and his office gets to know about every sparrow that moves in the government. That I can testify from personal knowledge.

This was all in public domain...

The notings on the file indicate that the PM was quite alarmed at what was happening. These licenses were given on 10 January, 2008. On 11 January, the Principal Secretary notes that the PM desires to take into account the developments concerning the issue of licenses. This means perhaps that he wanted to have a meeting about it. The file is submitted back to the PMO on 15 January. Now see what the Principal Secretary notes.

"Prime Minister wants this informally shared with the department. He does not want a formal communication and wants PMO to be at arms length". Why would he give this instruction to his officers unless he knew that there is murky stuff going on and it is better to stay away. I think he had full knowledge and I think he had deep apprehension that something terrible has happened and his only concern was let's stay away from the filth. That is not what a PM is supposed to do.

You mean, he knew but shied away from taking any action?

This particular sentence, at arms length, very well describes Dr Manmohan Singh's attitude in regard to CWG, defence acquisitions and every other major decision. Weapons purchases are not happening because Mr Antony (Defence Minister) also wants to stay at arms length on every decision. I think this will be an apt title for a book on Dr Singh's tenure as PM - At Arm's Length.

Raja has also said that if the policy was wrong, all former telecom ministers must be jailed.

Raja says that he was following earlier policies but he flouted them. Take first-come-first-served (FCFS): He says I will FCFS. Then he disregards pending applications. If you were following the policy, you should have dealt with them first. Then he says I will have this cut-off date of October 1. After the applications are received, he says no, I will advance deadline to 25 {+t}{+h} September.

Then he changes FCFS. First, it was time and date of application received. And suddenly it becomes time and date of fulfilling the conditions in the letter of intent. Where is LoI? People rushed for it. It says, within 40 minutes, bring a banker's draft of Rs1,650 crore. Companies he favoured already has those drafts from Mumbai and sitting in his office. How could they get it in 40 minutes?

When he could not find adequate spectrum for his favoured companies, he changes the priority list in the Punjab and Maharashtra circles. You show me one single, unique, solitary instance during my period or anybody else's period during NDA when any of this would have happened. So yes, people who do wrong should be in jail and continue to be in jail without bail.

My publicity agent

Thu Mar 24 2011, 00:45 hrs

Another scam . . . Inquiry into disinvestment of VSNL” — the papers proclaim. The announcement has been preceded by stories along similar lines in two magazines, a planned build-up to the announcement.

The government does seem to have surrendered its judgment to a bully. And it will be sorry for it. But I will come to that in a moment. The charge is that as the minister of disinvestment in the NDA government, as part of disinvesting government equity in VSNL in 2002, I “gifted” 774 acres of prime land in four cities to the Tatas.

The facts are the exact opposite.

During due diligence of VSNL, it was discovered that the company had been buying land over the years. Technology had changed. It was now possible to provide the same services with infrastructure spread over significantly less land. VSNL, working with advisors, identified 774 acres of land as “surplus”, in the sense that it would not be needed in the future to provide the services for which VSNL had been constituted

Accordingly, in the agreements governing disinvestment, it was provided that whoever won the bid for the company would not get this land. The company was valued by excluding this land. Indeed, the article in the agreement was framed in such extreme terms that at one stage the potential bidders said that they would not go through with the bids at all. The officer who was handling the disinvestment — one of the strongest officers I had the good fortune to work with, P.K. Basu (now agriculture secretary) — told them to go home, and forget the disinvestment. The article would not be diluted one bit, he told them, disinvestment or no disinvestment.

Eventually, they came round and the disinvestment went through. It was one of the most hotly contested cases. On the one side was Reliance — Dhirubhai Ambani was still alive, and was calling the shots. On the other side were the Tatas. The Tatas won, by a whisker. That outcome firmly established the credibility of the disinvestment process. “Even Dhirubhai Ambani could not find out what was going on in your ministry,” observers told us.

The article that Basu and his colleagues incorporated is worth reading. It is a short one. It could have been accessed by anyone from half a dozen sources — but by now it is no surprise that sections of the media will deliberately not read!

Please read the article, and then I will set out its implications. Here it is:

4.7 LAND

(a) (i) The strategic partner confirms that it shall cause and procure the company to hive off or demerge the land into the resulting company pursuant to a scheme of arrangement in terms of the provisions of Section 391 to 394 of the act.

(ii) The strategic partner confirms its understanding that it will transfer all such shares in the resulting company to the government as it may acquire as a consequence of this transaction, that is a minimum of 25 per cent of the resulting company’s issued equity shares or a higher number which shall include shares in the resulting company that it may further acquire as a consequence of any further sale of the equity shares in the company by the government to the strategic partner, prior to the demerger, as part consideration of transfer of the transaction shares and any subsequent sale of the company’s shares by the government to the strategic partner, pursuant to this transaction.

(b) The strategic partner confirms that:

(i) it shall do and cause to be done all and any such acts, matters, deeds and things as are necessary, usual or expedient including voting in favour of the item of business relating to the approval of the scheme of arrangement to implement the hiving off or demerging of the land into the resulting company;

(ii) it shall not directly or indirectly do or cause to be done any acts, matters, deeds or things which may adversely affect or delay the hiving off or demerging of the land into the resulting company.

(c) (i) If for any reason the company cannot hive off or demerge the land into the resulting company then, subject to Article 5.6 (b) (iv) and (xiv) hereto at any time when the company sells or transfers the land or agrees to sell or transfer or otherwise develop the land, the strategic partner shall pay to the government within seven days of the sale or transfer of the land an amount equivalent of 25 per cent of the benefit accruing to the company pursuant to such sale or transfer or otherwise development of the land, as determined by the appraiser, after taking into account any impact under the Income Tax Act, 1961.

(ii) Subsequent to this agreement and the share purchase agreement, if the government sells more than 25 per cent of its equity shareholding in the company to the strategic partner, then the percentage of amount to be paid to the government by the strategic partner on account of sale or transfer or otherwise development of the land under Article 4.7(c)(i) shall increase in proportion to the percentage of such further sale of equity shareholding in the company by the government to the strategic partner. For the purpose of this article the term “transfer” shall include sale, lease, licence, grant of development rights or the parting of physical possession of the land or transfer of any interest, whatsoever, in the land.

The article provides, first of all, that whoever wins the bid — and there could have been no plan to pass on a favour to the Tatas, etc, for no one knew who would win the keenly contested bidding process — shall not get the surplus land. The excess land would be detached from VSNL. A new company would be formed, and the land would be transferred to it.

Second, that the shareholding of this new company would be what the shareholding of VSNL was before disinvestment. That is, the bidder who won would have no share in it at all. The government would have the proportion that it had before disinvestment — about 52 per cent. Employees would have the proportion they had. The rest — about 47 per cent — would be with the general public that held shares of VSNL, the company was listed in both India and the USA. In a word, a government company would be set up. And this government company would acquire the land.

Third, in case such a company could not be formed and the disinvested VSNL decided to part with the land, it would be able to do so only if the government agreed to the proposal. The reason for this was that, even after disinvestment, the government would continue to hold 26 per cent of VSNL’s equity. The sale of land, or disposal of any rights in an asset such as land, can only be done by a special resolution of the board and that resolution cannot go through unless the party that holds 26 per cent of its equity agrees.

Fourth, if that new company could not be formed for some reason, and if the government approved the proposal of VSNL to sell the land, the entire proceeds would be distributed in accordance with the pattern of shareholding that prevailed before disinvestment — that is, the winner would get absolutely nothing; the proceeds would be divided between government, employees and the general public in the proportions in which they held the shares before disinvestment.

There was a fifth factor which was especially important, as it caused the greatest heartburn among potential bidders. This is contained in clause (c) (ii) reproduced above. This clause provided that if government shed more than 25 per cent of the equity it was holding of VSNL, then the share of the proceeds that the disinvested VSNL and the winning bidder would have to pay to government out of any sale or transfer of land or rights in it would increase proportionately.

Sixth, the hands of the prospective bidders were tied tighter by incorporating a very comprehensive definition of “transfer”. The article had used the term “transfer” of land, etc. In the last sentence, it was provided that “for the purpose of this article the term “transfer” shall include sale, lease, licence, grant of development rights or the parting of physical possession of the land or transfer of any interest, whatsoever, in the land.” All proceeds from any form of transfer would go to the government and the original shareholders and not a penny would go to the successful bidder.

Finally, a series of interlocking clauses tied the prospective winner in perpetuity! Privatisation agreements have “call” and “put” options. That is, after a specified period — say, three years — the winner can “call” on the government to sell its residual shares. Similarly, the government has the right to “put” its shares for sale. But in the VSNL agreement, we provided that even if the government parted with all its shares through either option, it would always retain one share — known as “the golden share”; and that by virtue of this single share, all the rights it had in regard to the surplus land would remain with the government!

In other words, the agreement provided that neither the surplus 774 acres nor any right in them whatsoever shall go the bidder who succeeded in winning the contest. So, where does the minister get this notion, parroted by some magazines, that 774 acres were gifted to the Tatas?

“But why was the land not just taken out of VSNL before disinvestment?” the innocent ask. VSNL was a listed company — it was listed both in India and the US. If such a substantial asset was taken away, any shareholder could have gone to court and halted the whole process on the charge that his interests had been harmed. On the other hand, if it was not taken away, the government would be accused of making “priceless” land over to whoever succeeded in winning the bid. Hence a solution was devised: the land would be taken out of VSNL, but the interests of pre-disinvestment shareholders would not be impaired. The land would be turned over to a new company in which the shareholding pattern would be what it was before the disinvestment of VSNL. That was an excellent solution that Basu and his colleagues devised, and it has stood the test of time. The winner did not get the land. The shareholders did not go to court!

“But didn’t VSNL have enormous amounts of cash? Wasn’t this just handed over to the Tatas?” Yes, VSNL had a cash reserve. The fact is that this cash was drawn down before the company was disinvested. The government had VSNL declare a special dividend of 750 per cent! As a result, the winning bid along with this dividend secured for government a P/E ratio of 11 as against the measly 6 at which VSNL shares were trading before disinvestment.

When no other tack is left, critics are led to ask, “But why has the new company not been set up even though nine years have passed since VSNL was disinvested?” The fact is that the government and the winners — the Tatas in this case — tried to work out a solution. The attempts couldn’t get past disagreements. For instance, the Tatas said that as the land did not belong to them, and as it was to be transferred to a company that would in essence be a government company, the government should pay the stamp duty that would be incurred in such transfer. Similarly, as the monopoly of VSNL in regard to international calls had been curtailed by two years, a compensation package was announced by the government. They felt that this was inadequate. As the issues could not be resolved, they proposed that the matter be referred for arbitration. I had no problem with that proposal, but my colleagues in the ministry correctly counselled that as the proposal had revenue implications, we should send it to the finance ministry. That is what was done.

The government changed. Since then, I see from what has appeared in public that the Tatas kept writing to the government requesting the latter to settle the matter. They wrote that there were three alternatives, and that any one of the three would be acceptable to them. The government — the UPA government, that is — kept saying that it was examining the issues and would get back to them. It did not.

Kapil Sibal says this delay has been very costly to the people of India, and that is why he has ordered an inquiry. I say — “Bravo! Excellent!” He should institute an inquiry into the conduct of ministers whose negligence has cost the country so much.

The ministers? P. Chidambaram and Pranab Mukherjee, the finance ministers of the UPA governments! For, remember, the department of disinvestment has been under the finance ministry since the UPA formed its government in 2004. Maybe they are the real targets of this buccaneer? No?

Why else would Kapil this time round entrust the inquiry not just to a handpicked judge but to a handpicked officer working directly under him?! As for me, far from being my inquisitor, Sibal is my publicity agent! He keeps me in the news. And gratis!

The writer was Union minister for telecom and for disinvestment in the NDA government

‘Everything shows that the Prime Minister knew and did nothing about the (telecom scam)’

Source: Indian express

SUNIL JAIN: Kapil Sibal claims A Raja followed what the NDA government had done on spectrum allocation. As telecom minister during the NDA government, can you explain what you did?

Arun Shourie: People today cannot visualise what the the telecom sector was like at that time. Tele-density today is 60 per cent, at that time it was 4.1 per cent. There were large parts of the country where despite bids being invited, not a single operator had bid. There were parts of the country where bids had been won and licenses had been granted and their services had not yet been activated. For example, Northeast, where nobody had taken the licence. The whole sector was collapsing. It was rescued from that by shifting from fixed fee to revenue sharing. A third factor was that there were 20 types of licences and fees and this led to much litigation. The whole sector was caught up in litigation--we have had a small glimpse of that in the exchange of letters between Mr Rajeev Chandrasekhar (Rajya Sabha MP)and Mr Ratan Tata. There were a host of issues related to licences and subsequent litigation and Ataliji (Prime Minister Vajpayee) told me that this sector needed cleaning up. I felt the main problem was the splintering of licences. This was one of the two or three sectors which was still left in the licence quota raj phase. I felt we must unify licences and the government should be technology neutral, it should be service-provider neutral, it should be service neutral. The idea emerged for a unified licence, in which a service provider can provide any service to any user anywhere in the country using any technology. This matter was referred to TRAI. TRAI wrote a very good report at that time (October 2003), the substance of which was that you should be technology agnostic, don’t go in for a universal licence in one go because it will lead to complications. They suggested we do it in two phases.

Sunil Jain: We understand that there was a controversy around Reliance and WLL, which was illegal at that time. TRAI came out with a recommendation, saying let’s go for UASL (Unified Access Service License), which meant that whoever had a fixed licence can offer WLL services. The second recommendation was that having done this, any future person who wanted to offer mobile services, will have to do a multi-stage bidding for that.

Arun Shourie: The concept was you will have automatic authorisation for anybody who wants to come in. With a low entry fee, divorce the spectrum from the licence. Whereas the earlier practice was that spectrum was given as a part of the government obligation for having allowed you to provide a service.

SUNIL JAIN: So TRAI allowed people the option of moving to UASL and in future, if anybody wants to offer a new service, please do multi-stage bidding for that.

Arun Shourie: Only after the unified licensing regime is introduced, please don't forget that phrase. But the unified licensing regime has not been introduced till today.

Sunil Jain: Let us assume for the sake of argument that BJP did everything wrong and was favouring people. Of the licences issued, you issued only some of them, the rest were all issued by the Congress minister. In 2005, the Congress came out with some new guidelines for what the prices should be for UASL. Would this be your answer to Sibal that if you assume we were wrong, in 2005 December when you issued new guidelines, why did you stick to the Rs 1,651 crore price?

Arun Shourie: That is a good argument which I shall remember. But you have to look at the growth in tele-density--that is what determines whether the 2001 price is justifiable or not. Between 2001 and 2003 there had hardly been any improvement in tele-density, but if you use the same price in 2009, then obviously that is wrong when tele-density has increased to 48 per cent. The point about Raja is that he followed no principle, no policy.

First-come-first-served was never the only criteria. When Raja said first-come-first- served, there were 539 existing applications. In a first-come-first-serve situation, those should be processed first. But he didn't process them. He contacted the real estate companies and said bring in your applications with a cut-off date of October 1. Four months later, he made September 25 the cut off date. A large number of applications were removed but not the ones he wanted to favour. Then he changed the basis of the first-come-first-serve process. He changed it from the date and time of receipt of application to the date and time on which letters of intent conditions are fulfilled and paid. That means you must bring Rs 1,651 crore, as CAG says, in 41 minutes. After that, he was still not able to give Swan Telecom the amount of spectrum which he had contracted for and so he changed the priority list in circles which are very lucrative today, like Punjab and Maharashtra and this was the first-come-first-served process. So to say that I am following Arun Shourie’s footsteps is wrong. I have said this many times--Raja, stop following my footsteps, follow my advice. My advice is turn an approver. Even your leader Mr. Karunanidhi has said one man could not have made so much money all by himself, so tell us who are the other persons.

Rishi Raj: The Prime Minister’s silence has been an issue. The Cabinet decision of 2003 said that finance ministry should always be involved in pricing of spectrum. So when Raja did not listen to the finance ministry as well as the law ministry for auction, the two ministries could have independently approached the Cabinet on the matter, which they did not do. How do you view this?

Arun Shourie: That shows the character of the government today. Chidambaram wrote a letter and there are several letters on record written by Subbarao--who's now the RBI Governor, but was then the Finance Secretary--saying don’t do this. By contrast, I discussed every single matter with Jaswant Singh, Finance Minister then and head of the Group of Ministers which considered the TRAI recommendations. More than that, the finance ministry is institutionally represented by the member finance in the Telecom Commission. In Raja’s time, the member finance got so disgusted with Raja’s illegalities that she sought premature retirement. It is my personal knowledge that Prime Minister had called Nripendra Misra, who succeeded Pradeep Baijal as the chairman of TRAI, to brief him. He said that Raja had claimed he was following TRAI recommendations, was that the case or not?

Nripendra Misra said no, he was not. Then Pranab Mukherjee called him and Nripendra Misra told him the same thing. Nripendra Misra came to me after a few months and said this is what they have called me for, what should I do.

I said please put it on record, files last a long time. So Prime Ministerknows from Nripendra Misra, from the press, he knows of the violations reported by every operator. He himself writes a letter saying that complaints that are coming in, please consider a transparent procedure for auctioning the spectrum. As I have mentioned, Sibal is the advocate of Raja and not of the government. Each time he defends Raja, he implicates the Prime Minister.

There were two persons who were handling affairs for Raja, one was Chandolia (Raja's private secretary) and there was another person. Raja was cruel to this other person, he fell out, he sought transfer from the department, started giving out information, none of the journalists wouldtake it. He was receiving threats, lures of money but he was the hero of the entire situation, he kept giving out information. In August-September 2009, I met the PM outside the Rajya Sabha. I told him that ‘under the umbrella of your good name loot is going on’. I showed him a list of the front companies and what Raja was doing. I told him about this person and that he was ready to give the entire evidence on record. I asked if I could meet Principal Secretary TKA Nair. Then I could give him all these papers and CBI or someone could investigate. I waited for one month but there was no call. I then contacted Ashwini Kumar, Director, CBI. I gave him all the papers and said, there is this man and here is his telephone number, he will give you all the evidence. CBI contacted him and had a series of meetings with him. Nothing happened so I asked the CBI what happened and they said, `Sir your man knows everything, we have followed up, everything is ready but we have to wait for a nod of the Prime Minister'. Nothing happened and nothing was going to happen. Then this meteor of CAG fell and Raja was indefensible. All the companies of Raja that have been raided are in the list that was given to the CBI at that time. It turned out to be absolutely correct. The rapidity with which they are able to move right now is precisely because they knew everything already. The Prime Minister has to be encouraged to be a good man, a good man means who enforces goodness in the circles which are under you. In this case, everything shows that Prime Minister knew and did nothing.

Shekhar Gupta: Does the CBI have sufficient evidence to convict people?

Arun Shourie: Yes. I had been told that in one set of transactions, they have been able to track the money trail. I would not be surprised if some of those persons--not just Raja and his advocate Kapil Sibal--are also deflecting attention to a JPC, and other matters. They don’t want the prosecution to proceed.

Shefalee Vasudev: Everything seems to be falling apart--civil society and the state. If you had to start a clean-up process, would you start with judicial reforms?

Arun Shourie: When such situations arise, think of Gandhiji’s phrase: anything, anyone, anywhere, anytime. We should not think of just judicial reforms, police reforms or qualifications for legislators. Many people are now feeling that the situation is ripe for another people’s movement. Political parties feel they don’t have the credibility at the moment, they have to find some non-political faces to start the process. You can guess the names they are gravitating towards--APJ Abul Kalam is one and three former chief justices of India. People feel the situation is ripening for a people's movement--the government is being buffeted, it will continue to flounder.

Ravish Tiwari: The Opposition today is looking for a protagonist. The BJP is going through a power game within its own ranks. There is no protagonist like VP Singh in 1989. What is the remedy?

Arun Shourie: I don’t want to comment on the BJP. But sometimes, erratic things throw up protagonists. I am not saying this is going to happen. It is a very different public today and a very different country where money-making is accepted and looked up to. People have got accustomed to these things. So I am not saying this is the solution. But from random situations, protagonists do rise. For instance, who thought that Mohamed ElBaradei would become the focal point of a people’s movement in Egypt? However, mass movements, even if ignited, can remove but cannot construct. Construction requires a much longer effort.

Soma Das: A few days ago, you said that Pranab Mukherjee is one of the best PMs we are yet to have.

Arun Shourie: He is certainly one person who has goodwill across the political spectrum. He is certainly mature, I don’t know about other things. Many persons are seeing a window of opportunity for themselves between Mr. Manmohan Singh demitting office and Rahul Gandhi not being ready, so ‘kisika bhi number aa sakta hai.’

Shekhar Gupta: Has the CBI been in touch with you?

Arun Shourie: I had rung up Mr. A P Singh, the CBI Director, about two months ago, saying that now that you are questioning former officials like Pradip Baijal and Vinod Vaish, I am sure you would want to question me, so I will come any day. The date has been fixed for February 21.

Shekhar Gupta: Is it your instinctive sense that whatever the CBI is doing is right?

Arun Shourie: They are absolutely on the right track. The reason is twofold: the monitoring by the Supreme Court and second, it is not difficult to be on track when public pressure is so intense. Supreme Court must continue to monitor it like a hawk and public pressure must continue. We must never forget that this is just the first stage, even the investigation is not over. After that the trials will start, appeals will be made, etc. So this requires perseverance.

Amitabh Sinha: Jairam Ramesh has been taking your name in the Lavasa controversy. You live in Lavasa, can you tell us what you think of the case?

Arun Shourie: For reasons that do not have to do so much with the merits of this case, Jairam has taken an extreme position. I had sent him an email in this regard saying, please don’t think of ‘either-or’ but ‘and-also’. Secondly, if the state of India gives clearance to POSCO or Vedanta, and they spend time and money and then, seven years later, you say stop the work, it brings the Indian state into question. In the case of Lavasa, I can tell you, the developers are thinking in terms of a model, they are aiming for international recognition. So they are having bio-mimicry workshops, plantation workshops and hydro-seeding and they take great pride in that. Sitting in Delhi we can’t realise what happens but there were 8,000 workers there, mostly from Bihar with their families and little children and suddenly no work. Many of the local people had opened vegetable shops, milk stalls--all closed. The real issue is that there should be some norms. I am told Jairam will give the clearance on February 14 for the first stage of Lavasa, so I hope that happens.

Ravish Tiwari: In the name of social expenditure, we are spending Rs 30,000 crore on NGREGS while the allocation for rural roads is only Rs 10,000 crore in the budget. Similarly, you are coming out with food security rather than creating infrastructure for storage. So how are these things going to play out for the future of the country?

Arun Shourie: Only educated people who are not going to stand for elections can oppose this. Schemes like NREGS are like throwing money out of the window. Unless delivery measures are improved, all these populist measures are going to boomerang. I opposed this at that time to the great discomfiture of the masters in BJP. Populist measures are a main cause of the current inflation. People like Yashwant Sinha, who work in their constituencies, will tell you this is nothing but centralised corruption.

Ravish Tiwari: Has India lost its story?

Arun Shourie: In America, you are getting just one per cent interest, here it is 8.5-9 per cent. That is why FII money is still coming in. I meet investors all the time, and they are all now expressing concern. They say that the long-term Indian growth story remains but we are all living for the short-term and what about that?

Transcribed by Smita Aggarwal & Sweta Dutta

For the longer version, visit www.indianexpress.com

Nobody fears SONIA GANDHI

Source: rediff

In part one of this interview, Arun Shourie, former newspaper editor, twice member of the Rajya Sabha, former Union minister, right-wing thinker and author, explained the minefield of the 2G spectrum scam and the Niira Radia tapes. Part I: 'BJP and Congress are one party'
In the concluding part of the interview with Rediff.com's Sheela Bhatt , he explains why Sonia Gandhi and Manmohan Singh are losing control over the government and the Congress party.
One of the issues revealed in one of the Radia tapes is that you were not given a chance to speak on a Budget-related issue in Parliament.
In her conversation with N K Singh, a former bureaucrat and now a Janata Dal-United MP, she says she didn't want you to be given a chance to speak by the BJP (Bharatiya Janata Party).
Did you discover the alleged pressure on your party from the tapes or did you know about it before?
Do you think corporate people can influence the BJP?
Why don't you listen to the tape? I was astonished when I reached Parliament that day. But what can you do? I didn't know that such pressure had worked.
I don't blame the corporates as much as the political process and then these lies are being put out (in defence by the BJP).
And my friend N K Singh says this was a social chat. Arre, look at your tone. You are talking for nine minutes to Radia. Out of that for five minutes he speaks on how he was successful in subverting the BJP's speakers in the debate on the Budget.
N K Singh now says he rejected the proposal that favoured Mukesh Ambani's Reliance when he was revenue secretary.
How interesting! Then what about the tape? This concession (to Reliance's gas project) was made by (Union Finance Minister) Pranab Mukherjee.
A revenue secretary, who has written some clarification, overruled this concession. (N K Singh says on the tape) 'We have to get it restored, otherwise we are nowhere. The initiative they have taken will go nowhere.'
Therefore, Arun Shourie who has taken the difficult position in the BJP's party meeting, has to be managed, he says. He then says, we have got Venkaiah Naidu to speak first.
Somebody has analysed Venkaiah Naidu's speech, in which the sentence is there (supporting Reliance) that all these tax concessions must be continued and given for the gas infrastructure. Where is the doubt?

That's why you are saying that the BJP and Congress are the same.

From all sorts of circumstances. Why is the investigation into the IPL (Indian Premier League) not being pursued? Because you find the same group (the Congress and the BJP) is everywhere.
It is now only the pretence of the government and the Opposition. Actually, they are the same.
Unless, the people of India wake up these things will go on. No issue will reach its conclusion. This is cancer. This is not a scandal.

Have you seen a detailed debate on Indian defence, on the dangers that India is facing from China?

When I was writing on it three years, five years and even ten years ago about China they would say 'paranoia'! I wrote on Islamic terrorism, about Pakistan.

Have you seen anybody taking up these issues in New Delhi? Television will debate the issue to find out who is responsible.
Someone says Nehru, some will say Indira Gandhi, some will blame (P V) Narasimha Rao or Manmohan Singh. The debate is over and now let's go and see Shilpa Shetty!
That's the problem! Just drama that is going on and on. Inside Parliament, it is arranged drama.

  You have heard the 100 plus Radia tapes uploaded on the Outlook Web site. It gives us an insight into India 2010. It's a very important insight. That's why I am urging people please, please listen to it. I am urging people to please publish verbatim.
Please bring out books. Please bring out CDs and reproduce it. So, that people would know how things are managed in government, in the Opposition and in the media.
How polices are being made, how personnel are being fixed. It's a wonderful glimpse. We owe a great degree of thanks to Niira Radia, and, to the persons who recorded these calls and to the person who leaked it.
And, a very important point: These tapes also show the power of the Internet.
Apart from Open and Outlook, the whole print media blacked it out, but Internet users had perseverance. The Hindu has taken it up now. Individual journalists like Girish Nikam and others are pursuing it. Now, the tapes have got some focus.
What has surprised you in Radia's conversations?
Nothing has surprised me. This is what I have been saying since long is the state of affairs. That is now confirmed by these tapes. This is not the state of affairs of India. The Radia tapes reveal the state of affairs in New Delhi.

When you were a journalist and a top editor, you shifted to politics.

In those years when you were moving from media to politics, obviously, even your phone call would suggest that you crossed that red line. Don't you think so?

I don't think so. You can tap my phone, anytime. What red lines? I consider myself a writer.

When I was in government everybody said I am not a politician. That's true. I am not a politician. I don't think my behaviour with my contact would be different than my writing.

If you ask me today, 'Do you know Radia?' Yes, I met her once. What is there to hide?

Did you ever think that Radia would be so powerful?

I thought she was an articulate lady. I never thought that she knows everybody -- very effective in her job. We can't blame her.

What's the solution for the Indian media?

First, the media should write about itself. It is extremely short-sighted about the media to black out these things. The Mitrokhin Archives (external link) revealed how (the then Soviet intelligence agency) the KGB boasted that they were able to plant 400 stories in such and such Indian newspapers.

The Indian media blacked it out. Then, privatetreaties.com (external link) of The Times of India that other people have now adopted has been completely blacked out.
Only two, three journalists are exposing it on the Internet. Again, on the issue of paid news, only P Sainath of The Hindu wrote about it.
When the Press Council of India was forced to appoint a committee to look into the allegations about 'paid news', the Press Council itself suppressed the report.

These Radia tapes should be a gold mine for Indian media to show how things work in New Delhi. The whole issue has come down to Vir Sanghvi and Barkha Dutt. That is not the whole issue.

The arguments forwarded by many media outlets is that the source of the Radia tapes is not known and nobody is sure if they are doctored or not.

That's just the dammed rationalisation. Has any single person disputed the voices on the Radia tapes? No. Has anybody been able to prove that tapes have been edited? No.

Barkha Dutt has written to that effect.

She has written, but what else did you talk about? Is that not clear enough? We can't go by the rationalisation that has been offered.

Another issue that has cropped up relates to privacy.

How many private things in Indian journalism has not been disclosed? Every second day the Indian media is disclosing people's private matters. Only in this matter are they sanctimonious about the Right to Privacy.

Do you think Ratan Tata is right when he says that?

It's a separate matter. The distinction has to be there between private talk and the matter that has impact on public policy that is not covered by the Right to Privacy law. I don't think even Ratan Tata has asked to that effect.

He only says that his private conversation with Radia that relates to personal things should not be leaked. There are personal things like what kind of food he likes etc. But, why should the tapes of his conversations, which are in the public domain, not be heard?

Take the case of WikiLeaks. Is the Indian media reporting or not?

Are they verifying the authenticity of the source? Are they contacting the persons concerned? Are they checking if these cables are edited or not? No.

Yet, they are carrying it. These are arguments manufactured for shutting your eyes.

Do you think the (EM>United Progressive Alliance UPA-2 is increasingly losing its sheen?

The cancer is now in the fourth stage in our governance structure.

It has reached what (writer Malcolm) Gladwell has called the tipping point.

I feel the prime minister has lost complete control of the government. Sonia Gandhi has lost control over the political processes and of the Congress party.

Nobody fears her. Till now, she was the supreme court. The way Congressman feared her, they don't fear her now.

That is why you see how she took time to take action in Andhra, Maharashtra and corruption in the Commonwealth Games. They kept saying the government is not doing anything on the CWG.

There was an sms doing the rounds where someone asked why the government did not act when the country was getting such a bad name? The answer was that nobody told the prime minister that the Games are going on!

Similar is the case of Sonia Gandhi. She has unlimited authority within the Congress, and therefore in the government.

When the country's name was jeopardised, if not the prime minister, she should have acted. Both have lost authority in their respective space.

In May 2009 everything was looking so hopeful and good for the Congress party. Why this transformation?

Because of the tipping point. Things go wrong inside the body and we don't realise.

Second, I have seen during Rajiv Gandhi's time that the prime minister and rulers are often misled by the fact that they control the situation within Parliament. But they don't realise that the situation outside Parliament is going out of their hands.

This is what happened to Rajiv Gandhi. He had three-quarters majority in the House. He thought he controlled everything. He was in control, but things outside Parliament slipped out of his hands. The same things are repeating today.

They must be thinking that we have won. We have managed other smaller parties. The Opposition party is our pocket borough! We have managed them. They were confident of them. Call them for dinner and praise them a little bit in public.

People can be driven by flattery; you don't even need to give them money.

Some small fry could be praised in public. They became instruments in the hands of the government. The government felt cosy in that position. Suddenly things went out of hand.

Do you agree with the BJP's demand for a JPC (Joint Parliamentary Committee to probe the 2G spectrum scam?

The JPC will derail the investigation. The government will get a perfect alibi for two years that the probe would go on.

There were JPCs on Harshad Mehta, Ketan Parekh, insecticides. What happened to them?

If a JPC is formed, then the issue of 2G spectrum will be killed. The CBI (Central Bureau of Investigation is now doing the job.

A Raja is out and there are many indications that they are pursuing the matter. I know from personal knowledge that the CBI has got details of the transactions involving many, many telecom players and Raja.

The best way is for the CBI's investigation to be monitored by the Supreme Court.

There is the petition to that effect by advocate Prashant Bhushan. He says it should be monitored by independent people. I think it should be monitored by Chief Justice S H Kapadia in whom we have faith.

The CBI itself has said the investigation will be over by March. We should wait till then.

'BJP and Congress are one party' : Arun Shourie

Source: Rediff

Arun Shourie discusses the real meaning of the Radia tapes with Rediff.com's Sheela Bhatt Arun Shourie is a former newspaper editor, twice a member of the Rajya Sabha, a former Union minister, right-wing thinker and author of 25 books.
He is currently working on this 26th book at the Lavasa complex near Pune, an attempt to understand human suffering through various religions.

Despite the spiritual thrust of his latest book, Shourie, 69, keeps a sharp eye on New Delhi [ Images ].
Here he takes readers through the minefields of the 2G spectrum scam and the Niira Radia tapes and explains how the political milieu in New Delhi has reached the tipping point.
The first of a two-part conversation:
How can we make sense of what is happening in New Delhi after the expose of the 2G spectrum scandal and the release of the Niira Radia tapes?
What's the bigger message that comes out of Radia's conversations?
This shows the extent of corporate penetration into government, into the media and into details of policy making.
The main point that emerges from the tapes is the level of corporate penetration. These tapes have shown that everybody is now linked to everybody else.
Democracy survives on counter-rallying power. It survives when there are alternate sources of authority. But now those have joined hands. There is, what my friend (Union Urban Development Minister S) Jaipal Reddy has once called, an invisible government of India [ Images ] which is completely stable.
The visible Government of India keeps changing, but that invisible government of India remains completely stable.
That is the real danger because now the Opposition is no different from the ruling party, whichever is the ruling party. The influence of those puppeteers behind the scene works on both sides. As a result, no issue is pursued to conclusion.
Is the 2G issue a new one? No. It is two years old. I know how I have taken documents to editors, to senior people in government. How can it be that only one reporter in one newspaper The Pioneer was following it? He was not withholding information, but not one newspaper or television channel touched it.
Today also the reportage is about what (former telecom minister) A Raja says, what Arun Shourie says. Is that the end of the story? I hardly read newspapers now. I just don't watch television. There is nothing to be learnt.
Why are journalists going for sound bytes? Why don't they take the documents home, study it and come to their own conclusions? I can't understand.
I feel completely distanced from this profession (journalism) and, of course, politicians. They are in bed with each other and with everybody.
Don't you think the BJP (Bharatiya Janata Party [ Images ]) also has a lot to answer for in the current situation?
I don't see the difference between the two. I feel they (the BJP and the Congress) are one party. They are jointly ruling. It is a dinner party. They meet at dinners. They meet socially. They decide on what has to be done about issues.
It is all very cooperative behaviour. They (the BJP) are shouting (for a Joint Parliamentary Committee). They know that it will kill the investigation.
A JPC will raise side issues and that is what both sides want. Because the corporates behind both sides are the same. They don't want the 2G spectrum investigation to proceed.
If you see the bigger picture of 2G spectrum, it is a battle between the old operators and the new operators in telecom...
But that's the separate issue...
It was during the NDA (National Democratic Alliance) government led by the BJP that (then Union minister) Ananth Kumar introduced Niira Radia to the New Delhi set-up.
Yes, that's one point. I remember there was a report in that regard in the Indian Express which had an eight column front-page story just below the masthead. The story was about Ananth Kumar and Niira Radia's association with each other. I don't recollect if Annath Kumar was then the civil aviation or tourism minister.
I was astonished to read that such person has been named in the report. I was told by a very senior official about the observations made by some agency. He was in a position to know about the minister. He told me that the report about Ananth Kumar and Radia's association is correct and that is why no action was taken against the published report.
See, issues are not taken up in New Delhi by anybody. The political parties and corporates have complete liaison with the media. Its not just Barkha Dutt and Vir Sanghvi, it is the whole lot involved with each other.
That's why political parties are not taking up the issue of the Radia tapes. The cpi-m (Communist Party of India-Marxist) shouted about the tapes, but the next day the story came that West Bengal [ Images ] Chief Minister Buddhadeb Bhattacharya [ Images ] was dealing with Radia for the West Bengal Industrial Development Corporation.
Now can the CPI-M [ Images ] shout 'crony capitalism' in the same way?
The problem is the homogenisation of India's political parties. All are becoming clones of each other. That means there is no counter-wheeling power any longer in the country.
Do you accept the argument of Prime Minister Manmohan Singh's [ Images ] supporters and Congress leaders that there are limitations to a coalition government?
Also, a Congress leader claimed that you can't ask the government to abdicate the duty to govern by taking action under pressure.
Why have they taken action now? Has the coalition fallen? No. These arguments are not right.
The prime minister of India has unlimited power. Our system is so structured that the PM knows everything.
Yashwant Sinha [ Images ], when he was finance minister, told me an incident. He got a message from a leader of the state that s/he wanted to see him. He asked Prime Minister (Atal Bihari) Vajpayee if he could can meet that person. Vajpayee said he could meet her/him.
When Sinha went to the state he met the particular leader without anyone knowing about it. He had lunch and talked about all sorts of things. At the end of it, the leader gave him an envelope. He kept it in his pocket. He came to New Delhi and only then opened it.
It was a legal brief on why cases against that leader should not be pursued by the Enforcement Directorate. He put the envelope in his drawer and did nothing about it. He forgot the case.
Several days later he met Vajpayee and spoke about his meeting with the state leader. Vajpayee listened quietly and kept looking at him. At the end of the meeting he asked Sinha, 'Aur woh lifafa (what about the envelope)?'
Sinha was astonished since he had told no one about the meeting and he did not act on what was requested.
Unless the prime minister deliberately shuts his eyes there is no difficulty in knowing everything. It would be incredible that the prime minister would not know. The system is so structured.
Second, all the telecom dealings were done in public. The Prime Minister's Office would certainly read the newspapers. There was so much commotion in Sanchar Bhuvan that people were beaten up the day the allotment of 2G spectrum was announced.
The point is that the prime minister himself wrote a letter and as politely as possible gave instructions that please examine the issue of auctioning of spectrum and determining its price in a fair and transparent manner.
And his minister disregards that.
Do you think that the PM would not know that?
It was the letter signed by him that was ignored.
Coalition dharma doesn't mean that I will become protector of the corrupt.
I feel the prime minister must have known about the 2G issue. That's evident from all sorts of facts.
Second, coalition compulsions do not give you the licence to abdicate your duty.
If your minister is doing something wrong, as captain of the team, the prime minister owes the responsibility to the country to stop the minister.
If the PM had confronted (Dravida Munnetra Kazhagam [ Images ] chief M) Karunanidhi with all the evidence, I don't imagine he would have told the PM, 'Don't take action against Raja'.
It is possible that the Congress party must have prevailed over the PMO in that matter.
I don't know. I have heard the opposite. Six months ago, the Congress party had told the prime minister that you remove Raja and it is your responsibility to explain this matter to Karunanidhi. That is what senior leaders of the party have been saying.
I don't know the inner party politics of the Congress. But your point of view or mine is immaterial.
The material fact is that nothing was done. People are asking, 'Raja ke khilaf karwai kyon nahi ki? (Why was action not taken against Raja?)'