If the CAG considers tax concessions announced by the govt as a 'presumptive loss', that would result in the diminishing of democracy, former RBI Governor D Subbarao told news agency PTI on May 2.
Subbarao's remark is related to the 2G scam case and the CAG's investigation of the presumptive loss to the government.
In his new book 'Just A Mercenary?: Notes from My Life and Career', Subbarao wrote at length on his role in the decision-making on the pricing of the 2G spectrum, an issue that later ballooned into a huge controversy for UPA-2 government.
The former central bank Governor asked, "If a democratically elected government decides to forego revenue in order to serve the larger public good of deepening telecom penetration, is it open to the CAG to substitute his own judgement for the government's and call it a 'presumptive loss'?".
If CAG is given power to raise objections of these kind, it might even go on to call every tax concession given in the Budget a presumptive loss, something that would not be in the interest of democracy, Subbarao contended.
"Surely, that would diminish, not enhance, our democracy," the ex-Guv told PTI.
Subbarao emphasised that the Comptroller and Auditor General (CAG) has the unquestionable authority to conduct a special audit of spectrum pricing, but the "decision to go into the question of presumptive loss to the govt and the assumptions made in quantifying that loss is questionable on several grounds," he said.
In 2007, under the leadership of A Raja from the DMK party, which was a coalition partner in the UPA, the Department of Telecom (DoT) concluded that it was necessary to issue licenses to additional 2G operators across all twenty-three telecom circles in India to foster competition within the industry.
The DoT sought advice from TRAI, which in turn supported the idea of expanding the number of operators and suggested that new license holders should be allocated spectrum at the same price as incumbent operators, as determined in a 2001 auction.
TRAI contended that without a level playing field, new entrants would be at a disadvantage, contradicting the objective of enhancing telecom services. As per the 2001 cabinet decision, the pricing of spectrum going forward was to be determined collaboratively by the DoT and the Ministry of Finance.
Subbarao's book reads: "When the issue came to the finance ministry for opinion, I took the view that it would be inappropriate to sell spectrum in 2007–08 at a price set in 2001 and that we must rediscover the price through a fresh auction."
Source Name : Economic Times