Law ministry had told CAG not to intervene

The law ministry had said three months ago that the comptroller and auditor general did not have the authority to examine whether any government policy has caused loss of revenue to the exchequer.

“[The] CAG Act 1971 nowhere provides that he [CAG] has any duty or power to question the wisdom of the policy/lawmaker...[they] cannot exceed the role assigned to them under the constitution/law. The CAG has no duty or power to challenge the policy decisions taken by the government,” the letter dated August 13, 2010, signed by Santok Singh, joint secretary with the law ministry, reads. The letter is in possession of DNA.

The alleged loss of revenue is part of the barrage of charges leveled by the CAG against telecom minister A Raja in its final report on 2G spectrum that has been sent to the finance ministry.

The report is likely to be tabled in parliament during the current winter session. Apart from stating that Raja’s spectrum allocation policy caused a loss of Rs1.7 lakh crore to the exchequer, the CAG also found Raja guilty of violating normal procedures of granting telecom licences, such as imposing arbitrary deadlines and procedures that kept many of the applicants out of the process.

Interestingly, the ministry had upheld the department of telecom (DoT) contention that the licences were issued at a fraction of their market value to enable winners offer cheap services.

The licences were later ‘resold’ by new entrants to foreign companies at 4-5 times the value at which the government had issued them. Pan-India licences were issued to firms at Rs1,651 crore on a first-come-first-served basis.

The law ministry’s opinion cushions the DMK leader from the most damaging charge against him — causing a loss to the state.
The DoT had sought the law ministry’s opinion when the CAG sent its interim findings to it and asked for comments.

Since the CAG had gone into the policy decisions of the government, the DoT felt it had no business to do it.

The CAG’s charter is to audit the accounts and ensure that policy so created had been properly implemented or not.