Geography Reference
In-Depth Information
Once an MP receives a post, he is expected to deliver funds to his party and can expect
trouble if he does not do so, as Suresh Prabhu of the Maharashtra-based Shiv Sena dis-
covered when he was forced by his party leader to resign from a BJP coalition government
in 2002 for not cashing in on his job as power minister. As a result, the government lost
an able, honest minister, and the crisis-ridden power sector lost a committed reformer that
it desperately needed. 'Even cynics were shaken when Shiv Sena supremo Bal Thacker-
ay ordered power minister Suresh Prabhu to resign on the ground that he was too honest,'
wrote Swaminathan Aiyar, a leading columnist. 'Never before has a Minister been sacked
on the ground that he did not make money at all, and so was unfit for high office.'
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2G Telecom
The most explosive corruption cases to hit Manmohan Singh's 2004- 2014 government
involved the use of discretionary powers to avoid inviting competitive tenders for the al-
location of telecommunications and coal licences. The biggest and longest-running case
(dubbed the '2G scam' because it involved second-generation wireless telephone techno-
logy) involved the allocation of licences, together with reported kickbacks of at least $40m.
This was widely known about, and even reported, for two years before it turned into a polit-
ical crisis at the end of 2010. I ran an article on my blog in November 2008 headed 'India's
ferring to A. Raja, the telecom minister. A few days earlier, the
Business Standard
had an
editorial headed
Licensed to make a killing
. Telecom spectrum needed for mobile phones
had been 'handed over' by Raja to a few 'select' companies.
Mint
said that his 'mistake'
(a kind euphemism) was that he did not auction the spectrum: instead, he allocated it to
companies that applied on a first-come-first-served basis for fees that were far below what
should have been charged.
Two of the companies, Swan Telecom (owned by DB Realty) and Unitech, were real es-
tate and infrastructure businesses with no telecom experience or assets. When the awards
had been made some months earlier, I had asked a contact why these companies were en-
tering telecom. It was pointed out to me that Raja's previous post as environment minister
brought him into contact with such real estate companies that wanted to obtain land alloc-
ations and permission, so what could be more natural than to see such friendly companies
following him to the telecoms ministry! Unitech paid Rs 1,651 crore for its spectrum alloc-
ation and then sold a 60 per cent stake to Telenor of Norway for Rs 6,200 crore, putting a
valuation of $2.1bn on the company. That was a profit of about 700 per cent in less than a
year - just for owning the spectrum, without any customers or experience. Swan similarly
paid about $340m and sold 45 per cent of its equity for $900m to Etisalat of Abu Dhabi,
