After a gap of ten long years, the government has decided to find out if additional spectrum was given away beyond the contracted level to two wireless service providers, Airtel and Vodafone, by the then telecommunications minister Pramod Mahajan, former telecom secretary Shyamal Ghosh and another official during 2001-03. Towards this end, raids were conducted over the weekend by the Central Bureau of Investigation (CBI) at the premises of the two firms and the residence of the two officials. What is the wisdom of this course of action today when Mr Mahajan has passed away, Mr Ghosh has retired, and Hutch, which was the operator then, has been acquired by Vodafone? The window of investigation chosen, when the BJP (now in opposition and spearheading the attack on the government over the spectrum issue) was leading the coalition government at the Centre and one of its members was holding the telecommunications portfolio, points to there being a political agenda behind the investigation. It is nobody’s case that the law should not take its course. Not only should it do so, but investigators and law enforcers should also act promptly so that they do not wake up long after an event and have their motives questioned. The recent spate of investigations has already had an adverse impact on the morale of civil servants, who are now likely to be more reluctant to take decisions for fear of CBI action many years later.
If business and industry become convinced that the past will be raked up by a regime in trouble to fight its political battles, business confidence across the board will suffer. In this particular case, there is an additional issue. If Vodafone has made huge investments and subsequently finds that it is having to answer for things done long ago before it came in, then foreign investors’ perception of being able to do business in India under a stable and predictable political and legal regime will suffer. It is not as if a case was pending against Hutch and Vodafone should have taken note of it when it came in. Not only is there no legal action pending, ministers belonging to the present political dispensation have more than once defended in Parliament the act of giving additional spectrum to operators.
This is perhaps as bad as recent instances of the government changing the rules of the game midway. ONGC was earlier obliged to pay 100 per cent royalty on the oil produced from its joint venture project with Cairn in Rajasthan. However, this arrangement was changed when Cairn sold its stake in the project to a Vedanta group company and the royalty became cost-recoverable from the project’s operational revenue. Similarly, companies that had won mega power projects were allowed to use coal from their captive mines for other power projects, a flexibility that was not obvious when the projects were awarded. And now the government is considering changing the production sharing contract for the KG-D6 gas exploration block so that it can restrict the operator’s cost-recovery from the expenditure it had made. It is time the government understood that entering into contracts while doing business is as important as honouring them.
