Indian Telecom Licenses Scam

Indian telecom license scam amounts to Rupees 1,763,900,000,000 (Rs 1.77 lakh crore for easy reading or $39.6 billion as an American pointed out) as specified in the report issued by Comptroller and Auditor General (CAG) of India. Now that is what I call a fraud. All the others are puny in comparison. India can beat other countries in this sphere easily. The amount is approximately 2% of national GDP and/or 1/3 of current tax revenue of India. Instead of the government earning this money from sale of precious assets, it was doled out as charity to the telecom operators by Mr. A. Raja. Now after 18 months of investigations conducted by CAG, all fingers are pointing to him.

Mr. A. Raja, The Poor Man

Mr. A. Raja, the telecom minister in charge of allocating licenses to telecom operators issued the licenses at prices less than the prevailing market value by the above-mentioned amount.  An old policy of 2001 was used to calculate the license price in 2008, which resulted in this massive under quoting in the bids. Mr. A. Raja generously approved the bids and granted the licenses.

Now after the Common Wealth Games and Adarsh Property Scam, Congress party is facing severe reputation damage due to high level corruption and unethical practices followed by its senior leaders. Mr. Ashok Chavan, now the Ex-Chief Minister of Maharashtra responsible for Adarsh Property Scam and Mr. Suresh Kalmadi responsible for Common Wealth Games debacle (now removed from  Congress Parliamentary Party’s secretary position) are no more in the party’s leadership good books. In all likelihood Mr. A. Raja is going to meet a similar fate.  The similarity between Mr. A. Raja and Mr. Suresh Kalmadi cases are that both are claiming that other senior party leaders including the Prime Minister’s Office knew what was occurring as they benefitted from the same. Both are alleging that they are being made scapegoats. No doubt the possibility exists.

My viewpoint is that removal from an official post is hardly delivering justice. As per the Indian Penal Code and Prevention of Corruption Act, these actions come under cheating, fraud and bribery. These are criminal offences and hence have specific prison terms attached to them. My question is will these esteemed personalities be tried according to the Indian laws and regulations or will they be let off with a light rap on the knuckles?

To read a detailed analysis of the CAG report, check out the article “The CAG Report: Raja has no clothes” on News Click.

18 comments on “Indian Telecom Licenses Scam

  1. Pingback: Indian Telecom Licenses Scam « Sonia Jaspal's RiskBoard | Telecom Regulation

  2. Pingback: Indian Telecom Licenses Scam (via Sonia Jaspal’s RiskBoard) « Pilant's Business Ethics Blog

  3. Sonia

    There is something wrong with the statistics quoted. E.g. $396 billion is not 2 per cent of India’s GDP, but almost a third etc. Worth re-checking all the data.

    As for punishment, please expect none. There is only reward for corruption in today’s India. To really change things you have to step forward and lead. Join FTI (


    • Definitely not completely. That is more of face saving measure by Congress to salvage the situation. Investigations are being now done on the companies who participated in the bid. Unless a proper clean up is done it is just a white wash to fool public.


  4. As is familiar, this scam will be forgotten. Time heals. Give it just a year and Mr Raja will be rewarded with a better position. This country can take any shock and still march forward.

    As we all know, alternatives are no better

    • Mr. Sethuram,

      Thanks for reading my blog. I beg to differ, each objection and the smallest action is a step in the right direction. Success is never ensured but the road followed should be right.

      And if alternatives were no better, India would not be in a position to become a global power in 60 years of independence. That shows the despite many wrongs which came to public eye, governments did quite a few rights also. Progress is slow, if we lose heart, it will not happen. So despite the odds one should continue on the right path.


  5. Dear Sonia,

    Of course every step counts..though i am a bit cynical of our justice system in that it is lengthy and cumbersome, I very strongly feel that every scam should be exposed. What I meant was that our present system in politics allows such people to go scot free…this is not good to hear, but is true

    Today’s papers say that this the Government may think of a snap poll if the PM’s name is in any way tarnished. Don’t You think it is a collossal waste?

    • Sethuram,

      No I don’t think it is a waste to take a snap poll on PM’s image. This is a democracy, and if people think PM’s image is in doubt, then definitely hearing their voice and acting in everybody’s best interest is good.


  6. Fraud can occur at any time, even from the first day of setting up a new customer account (commonly known as proxy fraud). When this happens, how can your team build in triggers during customer subscription phase to alert you to possible risks?

    Luckily, Wan Mahadzer Isllah Wan Puteh, Head of Fraud, from U Mobile has found a solution and he will be sharing his evaluations and insights towards overcoming proxy fraud at the 4th Annual Telecom Fraud and Fraud Risk Prevention conference on 7-8 December 2010 in Kuala Lumpur, Malaysia.

    The 4th Annual Telecom Fraud and Fraud Risk Prevention is led by global telecom operators such as Emirates Integrated Telecommunication, Du, Uninor, Dialog Axiata, Telecom New Zealand, British Telecom and Aircel Cellular . All will be sharing their strategies to combat fraud as an industry across all continents, and answering questions to the various challenges you are facing.

    With less than 2 weeks to go before the conference, I would urge you to register online today. With almost all the telecoms from Asia Pacific attending this conference, don’t be the only one left out!

    For more information please visit

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