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CAG Vinod Rai Deposes Before JPC On 2G Scam

New Delhi, Nov 15: Comptroller and Auditor General Vinod Rai on Tuesday revealed that his former colleague R.P. Singh had given a presumptive loss of upto Rs. 4.19 lakh crore on account of 2G spectrum

PTI [ Updated: November 15, 2011 21:16 IST ]
cag vinod rai deposes before jpc on 2g scam
cag vinod rai deposes before jpc on 2g scam

New Delhi, Nov 15: Comptroller and Auditor General Vinod Rai on Tuesday revealed that his former colleague R.P. Singh had given a presumptive loss of upto Rs. 4.19 lakh crore on account of 2G spectrum allocation, contradicting his claim that he was forced to accept a figure of Rs. 1.76 lakh crore.


The CAG also rejected all charges against him of having exceeded his Constitutional mandate, a point made by Prime Minister Manmohan Singh against him, and maintained that an adversarial position was inherent in his job.

There was also nothing wrong in the media briefings by the auditors on the 2G report,  Rai said recalling that such a practice was being followed since 1988, which has been upheld by the Madras High Court in 2004.

Appearing before the Joint Parliamentary Committee probing the scam, he contradicted Monday's claim by  Singh, who retired as Director General, Audit (Post and Telecommunications) and was the lead auditor of the 2G audit report, that he was forced to sign the final report that had pegged the maximum presumptive loss at Rs. 1.76 lakh crore.

Explaining the process of audit, the CAG maintained that the Branch Audit Office (BAO) report in the 2G case was changed by Mr. Singh and the same process was carried on in the CAG office.

“If the CAG cannot vet, examine, revise and decide on a recommendation of the DG, it also means that the DG cannot vet, examine, revise and decide on the findings and recommendations of the BAO,”  Rai said in a presentation to the JPC.

”...Should the figure of Rs. 4.19 lakh crore, worked on the basis of DGA (P&T)'s calculation, have been retained,”  Rai asked.

Sources said  Singh had signed on papers that gave a loss estimate ranging from Rs. 2,645 crore to Rs. 4.19 lakh crore.

“Different figures on loss estimates ranging from Rs. 2,645 crore to Rs. 4.19 lakh crore were projected at different stages of the audit process,” JPC chairman P.C. Chacko told reporters after the meeting but did not give details as to who had prepared that estimates.

Maintaining that the final decision on the final contents of the report was of the CAG,. Rai told the JPC that the initial report of the production sharing contract in the KG Basin had mentioned a “huge loss” due to non-surrender of oil fields.

“This, however, was not approved by the CAG in the final report. There was also a hypothesis that by restricting production, government's share of profit petroleum would get restricted.

“As this hypothesis could not be conclusively established through a sensitivity analysis, it was not included in the report. Final call is always that of the CAG,” he said.

Similarly,. Rai pointed out that certain strong expressions in the draft report on Air India and a figure of Rs two lakh crore loss in the S-band allocation in Devas-Antrix deal picked up from preliminary findings were dropped.

Justifying the use of the term “presumptive”, Rai said it is part of Direct Tax Code and the Income Tax Code recognises and uses terms including “presumptive income”, presumptive tax“.

“In our audit reports, more specifically in our revenue audit reports, we have been calculating presumptive losses. The terminology is thus not our creation,” he said.

Explaining why the word “presumptive” was used, Rai said the price of Rs. 1,658 crore was arrived in a bidding process in 2001 by market discovery. The sale of 3G in 2010 was by an auction — market discovery. Globally, spectrum has been auctioned.

Giving various calculations incorporated in different draft reports, he said the Stage I report prepared by branch office, Delhi, carried figures of Rs. 48,000 crore and Rs. 26,000 crore.

In the Stage II, this report was re-drafted by the office of DG (P&T) and figures of Rs. 2,645 crore, Rs. 2,651 crore and Rs. 36,000 crore were incorporated. The covering letter of May 31, 2010 mentions figures of Rs. 1,02,000 crore and Rs. 65,000 crore,  Rai said.

At Stage III, the draft report was further scrutinised and after examination of records not available earlier, a range of figures from Rs. 58,000 crore to Rs. 1.76 lakh crore emerged.

The top official auditor said while the Ministry of Finance gave two parameters to calculate the value of spectrum, neither was conclusively suggested.

“If so, how can the government itself thereafter orchestrate a ‘no loss' hypothesis,” he said apparently referring to Telecom Minister Kapil Sibal's claim of zero loss due to 2G spectrum allocations.

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