July 29, 1999

Press Release

The Communist Party of India (Marxist) squarely rebuts each and every single argument advanced by the BJP and the Cabinet Secretary on behalf of the government in responding to the charges that we had raised in the press conference held on 27^th July.

Let us first dissect the arguments of the Central government:

• `Government revenues to actually exceed budgetary provision of Rs. 1,700 crores on licence fee areas'.

• This is a totally misplaced fact. Because, the one-time settlement of all areas and all prospective payments for the entire licence period on account of licence fee is being sought to be shown as this year's receipt. The revenue receipt side in the budget estimates surely does not allow the government to do this without Parliament's approval. The amount which is being forgone for which a contractual arrangement existed was for Rs. 50,000 crores.

• `Revenue loss due to extension of affective date of licence only Rs. 1,400 crores, and not Rs. 50,000 crores'.

• We almost agree with the government on this issue with a slight amendment in the figure. It is not Rs. 1,400 crores but Rs. 1,443.58 crores as per the figures in the Cabinet Note. In fact, we never claimed that the immediate revenue loss is Rs. 50,000 crores. But it is a fact that government has forgone a legally bound contractual obligation from the private operators to the tune of Rs. 50,000 crores. And, this had to be done only with the approval of the Lok Sabha.

• `No contradiction in AG's opinion. AG has denied it'.

• We don't accept AG's denial as sacrosanct. The divergence of views is too glaring. Already on the basis of the two views that we had released to the press on 27^th, some papers have come out with comparisons which substantiates our charge.

• `FIs had an exposure of over Rs. 10,000 crore to the sector. This would have turned into NPAs in the absence of revenue sharing'.

• We agree with the government that FIs had an exposure of Rs. 10,000 crore. But any commercial exposure must have been securitised. So, why this concern? Will the government also tell us, of these Rs. 10,000 crores, how much was accounted for by the foreign FIs? Our information is that it was more than 90%. Does that intensify the concern? Will the government also tell us what is the total NPA of the public sector banks? Whether the government is showing similar concern about wiping out such NPAs? In any case, the entire amount must have been invested in infrastructure which, therefore, is recoverable.

• `Future revenue loss due to non payment of licence fees national since most telecom projects would have been able to tie up financing'.

• The less the government talks about future revenue, the better. Because, the government has not even defined `revenue' in proper legal-commercial terms, as was suggested by the Finance Ministry, while opposing the Cabinet decision. The government has categorically rejected AG's opinion given on 29.5.99 and which is the basis of the Cabinet decision, where he said: "The question of percentage of revenue share under the NTP-99 may be determined by the government based on the recommendation of TRAI". The government did not wait for the TRAI to give its recommendation and now the TRAI going to court, a long drawn legal battle with the government is very much on the cards. This will be the most convenient excuse for the companies not to pay revenues till the powers and jurisdiction of the TRAI is settled. This will also lead to forestalling of financial closure and the whole basis of NTP, 99 is knocked out in the light of this new development. So, while there is total uncertainty about future revenues, the government is foregoing at least legally valid contractual obligation for the payment of Rs. 50,000 crores.

• `AG's opinion to be put on internet'.

• This new penchant for transparency is extremely welcome. We would suggest that same transparency extended to Shri Jagmohan's view and the Finance Ministry's note opposing the migration package.

So far so good with our rebuttals of the Central government's defence. But, we repeat our million dollar question which the Cabinet Secretary has refused to respond.

How is it that the migration package is extended to the metro cellular operators who, in any case, had a miniscule amount as licence fee commitment and were to start real payment from this year at the rate of Rs. 6,023 per subscriber (a figure arrived on the basis of intervention by no less a Constitutional authority than the CAG) amounting to Rs. 300 crores for this year alone?

This is where the scam essentially lies.

As for the BJP's tirade, it does not merit any serious response. The fact that they are only invoking letters of opposition MPs to defend an otherwise indefensible case actually betrays their desperation. So far as Shri Somnath Chatterjee is concerned, we repeat his letter to the President (released to the press) clarifies the position. But let us put this in perspective and ask BJP:

• Since when Shri Atal Behari Vajpayee became so sensitive and responsive to opposition's suggestion? Because, if a fraction of the present response had been on display earlier, the nation could have been witness to a Rajya Sabha session on Kargil.

• Since when Shri Vajpayee started giving greater weightage to the opposition leaders over his Cabinet colleagues like Shri Jagmohan (whom he had conveniently shunted out of the Communication Ministry) and Shri Yashwant Sinha as Finance Minister whose Ministry's note we are releasing now.

• If the government was so keen on enlisting opposition's support to the migration package before finalising its decision, why did Shri Vajpayee did not call a proper all-party meeting before taking such a momentous step as is the normal practice for a caretaker government?

• Forget about individual letters, how is it that the Cabinet meeting rejected the proposal for setting up of a Telecom Development Fund, which was the unanimous recommendation of the concerned Standing Committee?

We feel that these questions will provide comprehensive explanation to the desperate cover up that the BJP and its government is now attempting, stinks as much as the scam itself.