Thursday, November 11, 2010


ON October 26, 2010, the All India Democratic Women’s Association’s flag was hoisted in thousands of hamlets, districts, and state centres, as part of the pre conference campaign launched across the country. Women’s voices were raised in slogans recalling our martyrs, and our leaders who had sacrificed their lives to build up this vibrant movement. It was an appropriate moment to highlight and disseminate the importance of the ninth national conference of AIDWA, to be held in Kanpur district of Uttar Pradesh, from November 9-12, 2010. For the first time, the national conference is being hosted in northern India, in one of the Hindi speaking states where “development” has barely touched the lives of large sections of women. It is a matter of deep pride for the movement that Kanpur city, with its heritage of working class militancy, came forward to take on this challenge. AIDWA salutes the leaders and activists who have made this possible. Indeed, this is a reassertion of our commitment to upholding the rights of the most oppressed and exploited sections of our society.

Kanpur is preparing itself to host the 812 delegates, special invitees, and representatives from different organisations who will soon be arriving there. The delegates have been elected at the twenty state level conferences, and three special conventions that have preceded the national conference. The venue has been named after Ahilya Ranganekar, in memory of our inspiring founding leader and valiant freedom fighter from Maharashtra, whom we lost in this period. The conference stage has been named after Kalindi Deshpande, in honor of a vibrant and much loved leader who has contributed to our movement in so many ways.
The reception committee under the guidance of our dynamic patron and leader of the women’s movement, Captain Lakshmi Sehgal, is gearing up for the event. Under the leadership of AIDWA’s national president and convenor of the committee, Subhashini Ali, tireless efforts are being made so that the needs of the delegates are adequately satisfied. The colourful banners and posters with slogans against hunger, price rise, violence, unemployment, and inequality, bring to attention the political, economic and social context in which this conference is being held.

It is appropriate for the conference to be held in Kanpur, at a time when the impoverished and the marginalised are sliding off the policy makers’ agenda. It will highlight the innumerable ways in which neoliberal globalisation is endangering the lives of the working people. In the frenzy over the visit from the US president, the UPA-2 has been ceding its rights on the civil nuclear liability bill, it is allowing the corporate criminals behind the Bhopal gas tragedy to escape punishment, and it is preparing to establish closer ties with a country which is fuelling war and gross abuse of human rights on the Indo Pak borders. The worst sufferers of the economic crisis caused by capitalist greed and inequitable models of development are the workers in developing countries, and women are the most vulnerable. The women’s movement will have to resist this pro imperialist tilt, and the move towards privatisation, and liberalisation, which has the most retrogressive impact on women’s rights.


Price rise has enriched the wealthy, since the government refuses to regulate the market, and speculative trading in essential commodities. The government policies have doubled the number of crorepatis in one year, while the incomes of the poor, the working class, and the middle class are being steadily depleted by inflation. There are huge stocks of food grains rotting in the godowns, but the government refuses to universalise, or even strengthen the PDS. The APL/ BPL categorisation is faulty, fraudulent, and a blatant way of dividing up the poor, in a country where 55 per cent of women are anaemic, and nearly 80 per cent children are victims of malnutrition. The so called food security bill will increase food insecurity.

The intensifying crisis in agriculture has led to huge outmigration of families, since the implementation of MNREGA has been tardy, with big exposures of corruption in many states. In a context of jobloss growth, survival needs have forced women into the most menial jobs. Women in the unorganised sector are the most overworked, and underpaid sections, and are vulnerable to sexual exploitation as well.

The role of the State in withdrawing from provisioning of essential services, the privatisation of education leading to higher costs of schooling, especially higher education, the lack of health infrastructure and proper public health facilities have deprived women of their democratic entitlements even further. The MFIs have entered into the self help groups of women as a new breed of moneylenders in the absence of an inclusive banking system supported by the State, and the public sector. These are worrying trends which exacerbate existing problems to much greater degrees.

The conference would discuss these developments, and also work out the future campaigns and struggles to combat these trends.


Women have been victims of growing violence even as they have asserted themselves in so many spheres. New forms of modernity have not meant greater democratisation, but rather, increased backlash against women from fundamentalist forces. The NCRB data (2008) reveal a 49 per cent increase in cognizable crimes against women between 1998 and 2008. Dowry deaths, domestic violence, molestation, and sexual assault have all increased. Legal reform has been weak, and limited. The law to address sexual harassment at the workplace is still pending. The government refuses to see the need for a separate law to address crimes and killings in the name of honour.

A matter of great concern is the resurgence of patriarchy and regressive ideas. Protective legislations for women that have been achieved after long struggle are under threat from these forces. This is also because of the conflict and gap between the economically privileged and the poor caused by neo-liberalism. We find the well-off sections supporting murders committed in the name of honour, we find sex selective abortions continuing amongst the affluent. The strengthening of conservative and fundamentalist forces that deny women democratic rights to speak, dress, go to work according to their preference, choose their partners, etc would contribute to the strengthening of the communal BJP. These are issues of concern before the women’s movement.

The traditional rituals, and regressive ideologies are getting a new lease of life from the tie up with the markets, and the media. The commercial media today abounds with examples of ostentatious marriages, display of wealth, propagation of rituals linked to consumption of goods, all being fed to the audience through aggressive TV channels. As these values get internalised, the practice of dowry and other retrograde, anti women practices get reinforced. The conference will formulate strategies to counter these trends.

There has also been an upsurge of identity-politics of all kinds. The consensus for common social justice is getting lost as different sections - castes, ethnic, regional, linguistic and religious groups - all fight for their separate spaces with growing intolerance against each other. While the intolerance may well be the result of neglect and exploitation, it makes it easier for global capital to make its incursions. The separatism it breeds establishes itself by going back to retrograde ideologies in the name of cultural identity.

The Left has been the only political force standing up against the aggressive spread of neo-liberalism and exposing its shocking effect on the lives and livelihoods of the people. It has represented the most advanced ideological positions, and upheld democratic rights of all sections of people. Today, there is a concerted attack on the Left and an attempt to whittle down its social and ideological influence, which has to be fought back effectively. The destabilisation being attempted by the Maoists, hand in hand with the other anti left forces, which has led to so much loss of life in West Bengal, has to be recognised, and combated by the widest possible unity of progressive forces.

One dimension of the women’s movement that has made considerable progress and which the conference will seek to strengthen is the interventions in the rights of minority women particularly Muslim women and efforts to increase our organisational presence amongst these sections. Similarly the conference needs to plan the strategy to increase its presence and its work amongst dalit and tribal women, who are among the most marginalised sections and are maximally affected by current policies, as also amongst young women today. The call of “Kanpur Chalo” therefore comes at a very significant moment for the women’s movement.


The conference will be inaugurated by the indomitable leader of the anti-imperialist struggle, our own Captain Lakshmi Sehgal. AIDWA president, Subhashini Ali, will preside over the inaugural session, in which Rajya Sabha MP Brinda Karat will deliver a special address on AIDWA’s legacy, and release the book Breaking Barriers in Hindi.

The inaugural session will highlight the struggles waged by AIDWA activists in several states on some important issues- against untouchability in Tamilnadu, for adivasi women’s land rights in Kerala, against political violence in West Bengal, for Muslim women’s rights in Tripura, and against honour crimes and killings in Haryana. The protest against caste atrocity undertaken by a dalit woman of Uttar Pradesh, supported by AIDWA, will also be highlighted.

In the delegate session, the political report, the organisational report and work report would be placed and discussed. Resolutions on important issues would be passed. Greetings from fraternal organisations will enthuse the delegates. A new CEC and office bearers would be elected on the last day.

Seven Commission papers on various issues would be placed. The group discussions on these themes will be collated, and presented in the plenary. The conference will conclude with a public rally on November 12 which will be addressed by Brinda Karat, Subhashini Ali, Shyamali Gupta (working president), Sudha Sundararaman (general secretary), Madhu Garg ( general secretary, UP) and other leaders of the organisation.

The conference will demand from the UPA government a serious commitment to passing the women’s reservation bill. It will resolutely oppose neo liberal policies. It will build resistance to fundamentalist and communal forces. The national conference of AIDWA is both a celebration of our work and our struggles and an inspiration to unitedly build an organisation large enough and militant enough to comprehensively address the diverse challenges facing the women’s movement in India today.

People’s Democracy
Vol. XXXIV, No. 45, November 07, 2010


ALL stakeholders in the institutions of higher education have since long been demanding that a comprehensive enabling legislation should be enacted by the central government in order to bring private general and professional higher educational institutions under social control. This should include regulation of fees and charges levied from students, admissions of students, reservations, course contents, examination, service conditions of the teaching and other employees, and infrastructural facilities.

It is to be noted that the draft of the Private Professional Educational Institutions (Regulation of Admission and Fixation of Fee) Bill 2005, which was put on the website by the Ministry of Human Resource Development (MHRD), was very weak and did not promise to fulfil the objective of social control. The University Grants Commission (UGC) too had come out with a draft regulation in 2007 regarding the “Admission and Fee Structure in Private Aided and Unaided Professional Educational Institutions.” Both these documents were allowed to lapse. The All India Council of Technical Education (AICTE) also notified several regulations about technical institutions, including the one in February 2010. The issue of social control still remained.


According to the statement of objects and reasons of the “Prohibition of Unfair Practices in Technical Educational Institutions, Medical Educational Institutions and Universities Bill 2010,” there is public concern that technical and medical educational institutions, and universities, should not resort to unfair practices. Such practices include charging capitation fee and demanding donations for admitting students, not issuing receipts in respect of payments made by students, admission to professional programmes of study through non-transparent and questionable admission processes, low quality delivery of education services and false claims of quality of such services through misleading advertisements, engagement of unqualified or ineligible teaching faculty, forcible withholding of certificates and other documents of students.

However, all these issues are not included in the body of the bill. It only says no institution, to be covered by the provisions of this bill, will charge admission or other fees more than that published in the prospectus. Every institution will have to issue receipt in writing for all charges. It will also admit students through a transparent process of competitive test or inter se on the basis of merit. The institutions will give detailed information through their websites and printed prospectuses six months in advance in relation to fee and other charges, admission process, number of seats, eligibility criteria, teaching faculty, pay and emoluments payable to teachers and other employees, physical and academic infrastructural facilities, etc.

Thus the institutions have to just inform these details. They are not even required to have these in accordance with some statutory norms. Even the rationale of their fee and other charges structure is not required. It is enough to declare fee, howsoever exorbitant it may be compared to the actual cost. Only in case of prospectus, it is stated that its price should not be more than the reasonable cost. It is well known that in private institutions ineligible faculty is appointed and even if the faculty is qualified, the salary paid is far less than that stipulated by the statutory authority. It is known that teachers have to teach in several institutions. However, under the bill, it is enough for the institutions to declare their infrastructure, etc, even if that is of low quality.

However, if any institution does anything contrary to the information published in its prospectus, it will be liable to a penalty which may extend to Rs 50 lakh. There is no penalty, however, if an institution has facilities and faculty even far inferior to the statutory requirements but the institution has published them on its website and in its prospectus.

The “capitation fee" has been defined as the amount demanded or charged or paid in excess of the fee and other fees payable (on which there is no control) as declared by an institution in its prospectus. No institution can demand or charge, and no person must offer or pay, capitation fee for admission. If an institution contravenes this provision, then the penalty may extend to Rs 50 lakh, but the bill is silent if it is offered by a person. But in order to cover the loss of the extra money they earlier used to charge under the table, institutions may definitely raise their fees exorbitantly and they only need to publish the new fee in the prospectus. However, even if they do not do so, then the penalty amount of Rs 50 lakh would be quite insignificant because, as we all know, the under-the-table transaction in case of just one student may be even more than Rs 20 lakh. This is bound to promote low quality education at exorbitantly high costs to the students. The proposed bill thus threatens to promote commercialisation of education.

So far, at the time of admission, many institutions have been keeping the students’ degrees, certificates or documents and refusing to return the documents to the concerned students with a view to inducing or compelling them to pay the fees for the courses they do not intend to pursue in those institutions. According to the bill, however, if a student withdraws from an institution, then the latter cannot refuse to refund to the student a proportion of the deposited fee as has been mentioned in its prospectus. An institution violating this norm will be liable to a penalty which may extend to Rs one lakh only.


Institutions have also been barred from publishing misleading advertisements about their recognition or in respect of their infrastructure or academic facilities, etc. If this provision is violated, the penalty can be up to Rs 50 lakh. But there is no provision of penalty if unrecognised institutions mislead the students. Recently, the UGC issued an advertisement in all major newspapers about the Indian Institute of Planning and Management (IIPM), warning the aspiring students that it was not a recognised university, did not have the right to confer or grant degrees and therefore it could not award an MBA, BBA or BCA degree. The website of the AICTE has a list of more than a hundred institutions which are unrecognised and action against them could be taken as per the UGC and AICTE norms. But no action has been taken so far except issuance of warning to the students that their programmes are unrecognised. This being the case, all these proposals regarding penalties appear to aim only at showing to the people that the government is serious about unfair practices by the institutions of higher education. One can well surmise how far such provisions are actually meant for implementation.

Demanding or accepting capitation fee is under the bill a cognisable offence while all other offences are non-cognisable under the Criminal Procedure Code (CrPC). However, a person (or every person) responsible for the conduct of an institution can go scot-free if it is proved that the offence was committed “without his knowledge” or that he exercised all due diligence to prevent the commission of that offence.

The most undemocratic, and the most atrocious, part of the bill is Section 18 that says, “No court shall take cognisance of any offence under this act which is alleged to have been committed by any institution or director, manager, secretary or other officer thereof, except on the complaint in writing of such person authorised by the central government or the state government in that behalf or by such person authorised by the concerned appropriate statutory authority, as may be prescribed.” It means that if a student or a parent is the victim of an unfair practice on the part of an institution, (s)he cannot directly move a lower court, High Court or Supreme Court to get relief. Such a student or parent can approach a court of law only through such “authorised” persons and only after these persons are convinced that an unfair practice has been committed.

Thus the provisions of the proposed bill do not promise to regulate the admissions, fees, course contents, examinations, service conditions of teachers and other employees, etc. Larger issues of social justice in and the academic accountability of educational institutions, or of excellence in education, have been totally ignored. It takes away the rights of students and parents to take recourse to a court of law to seek justice. The operation of admission and fee regulatory committees, set up by various state governments including Kerala in accordance with a judgement of the Supreme Court, may possibly be challenged once the central law comes to occupy the field. In short, the bill seems to be highly inadequate to tackle the host of corrupt and unfair practices being adopted by many of our institutions of higher education.

This bill is clearly meant to help the predatory elements in higher education in making more and more profits. It is therefore for us to force the government of India to protect education from these predators. For that purpose, let all the stakeholders, viz. students, teachers, non-teaching employees and officers of schools, colleges and universities, youth, parents, people’s science movement, etc, converge in Delhi on the coming December 2, in order to make the rally called by the national forum in defence of education a grand success.

People’s Democracy
Vol. XXXIV, No. 45, November 07, 2010


A fortnight before the national advisory council finalised its recommendations for the food security bill, the global hunger index report 2010 placed India in the range of countries that have an “alarming level of hunger” ranking it 67th out of 84 developing countries, a worse record than countries like Rwanda and Sudan. But this reality did not seem to have had much influence on the Sonia Gandhi headed national advisory council. The finalised recommendations fall far short of what is required to ensure a legal framework for food security but of even more concern is that in some respects the recommendations, through omissions and commissions do more damage than good. The core of this is the NAC stamp of approval on the failed and discredited system of targeting and the rejection of a universal system of public distribution. If accepted henceforth India by law will not have a universal public distribution system. This leads to the next logical step which the NAC has indeed taken of keeping intact as the basis of the food security law the fraudulent framework of policies related to estimation, identification and allocation of quotas for below poverty line families. The NAC recommendations go a step further by creating potential new conflicts and divisions among those with equally high stakes in food security. Thus a council with a declared mandate to “advise” the government has instead accepted the anti-poor advice of the government on this crucial issue of food security. As a bonus to the government it has further tried to make that advice palatable to the public by a dexterity in the use of words to conceal the actual import of the recommendations. It is equally unfortunate that with the exception of economist Jean Dreze who has given a note of dissent, the other members on the panel, many of whom, like Dreze have been leading votaries in the right to food campaign have compromised on the basic and fundamental requirements for food security.

The recommendations are as follows: (1) The targeting system will continue but under novel names. Thus the BPL families become priority sections (PS) and the APL are named general sections. (2) The numbers of PS will constitute 46 per cent in rural India and 28 per cent in urban areas (3) The general category will constitute 44 per cent in rural areas and 22 per cent in urban areas (4) It is left to the government to specify the criteria for inclusion in PS and general (5) Statewise rural coverage will be adjusted on the basis of planning commission’s 2004-2005 poverty estimates (6) PS sections will be entitled to 35 kilograms of foodgrains, at the price of three rupees for one kilo of rice, two rupees for one kilo of wheat. Millets will cost one rupee a kilo. (7) The general sections will be entitled to 20 kgs at a price not exceeding 50 per cent of the minimum support price for millets, wheat and rice. (8) The legal entitlement will be implemented in a phased manner.


The NAC has acquiesced to the fraud perpetrated by the central government through the planning commission that decisions of numbers to be covered by food subsidies have nothing to do with the actual numbers of those in need of food subsidies but everything to do with the amount of resources to be allotted. The country has been subjected to widely differing estimates of poverty ranging from the 27 per cent of the planning commission poverty estimates of 2003-2004 to 37 per cent by the Tendulkar Committee; 50 per cent by the Saxena Committee based on vulnerable social groups; to 70 per cent based on a 100 rupee daily income line by the Wadhwa Committee; 77 per cent by the Arjun Sengupta Committee based on the numbers of people who cannot spend more than twenty rupees a day. The NAC accepted none of these estimates but came up with a new figure. The first question is on what basis did the NAC decide the percentages for BPL families in rural and urban areas? There is no rationale behind the percentages they have chosen. The NAC has just tweaked the Tendulkar Committee figures from 37 per cent to a few percentage points higher but they have left the questionable methods and policies for poverty estimation intact. Other aspects include:

1. The linkage of centrally decided poverty estimates with actual quotas for the states has excluded large sections of the poor from benefits since there is a wide gap between the estimate and the actual identification. Instead of breaking this linkage, the NAC wants to import this linkage into the food security law giving it legal sanction. Thus the practice of arbitrarily decided quotas handed out to the states, is replicated in the NAC recommendation of a particular percentage being handed out to the states as the basis for the law. The law to be just should give a greater role to state governments in estimation and criteria for identification.

2. At present poverty estimates when translated into quotas are not on current but on old population figures. Today 36 per cent of the population are recognised by the central government as being eligible for BPL cards. Forget that this figure is based on wrong estimates of the planning commission. Even if we accept the assessment of 36 per cent, on 2010 population figures this should work out to around 7.70 crore households. Instead of this only 6.52 crores families are recognised. Why is this? Simply because in yet another fraud the planning commission uses old population figures in this case 2000 figures extrapolated from the 1991 census. Secondly the adjustment to the increase in population is done only after ten years even though there are yearly estimates of increased population. Thus just on this count alone over a crore of families have been denied BPL benefits. On this aspect also the NAC accepts the highly unjust denial of regular population updates in calculations for the quotas. The NAC recommendation fixes the percentage without any recommendation of regular not decadal updating.

3. It suggests division of the quota to states on the basis of the admittedly dubious estimates of poverty of 2004-2005 which had changed the ranking of the states. By using these estimates it has given approval to the planning commission rankings which had been challenged by the states.

4. Even while accepting the targeted system, the NAC follows the present objectionable pattern of marginalising the role of state governments in definitions of poverty and criteria for the identification of the poor. On the contrary it has a specific recommendation which leaves that entirely in the jurisdiction of the central government.


The NAC recommendations have to be compared not with what the curtailed and deeply eroded entitlements granted by the central government are, but what people in different states are actually entitled to because of the intervention of state governments. Food subsidies are not new rights being granted to the poor but have a historical background. However from the nineties, successive central governments instead of taking the initiative to enhance these rights, have pushed for the curtailment of these rights. But various state governments have tried in their own limited ways with limited resources to protect these rights. In this context, the NAC actually reduces the numbers.

The NAC recommendations translate into approximately 9 crore families to be covered under the BPL category. At present the central government provides 6.52 crore families in the country foodgrains at subsidised rates. However state governments have extended subsidies from their own limited resources to widen the food security net and have expanded this number to 11.04 crore families. This figure of 11 crores, as has been repeatedly stated by chief ministers, the most recent being at the national development council meeting, is on the basis of a partial acceptance of the numbers of poor identified in different states in house to house surveys which showed an even higher number. The first step the NAC should have recommended is for the centre to take the responsibility for at least these numbers. However there is a gap of around two crore families between the NAC recommendation and the present entitlement holders as identified by state governments. If the state governments were to accept the NAC recommendations then two crore families would lose their entitlements.

Further in at least 10 States present BPL card holders get rice at two rupees a kilo again because of state government subsidy. By raising the price from two rupees to three rupees, is the NAC enhancing or reducing food security?
With the huge stocks of foodgrains, the government emphasis on cutting out APL sections entirely from the food subsidy system had to be revised. Thus the planning commission in its note had said that while APL sections could be included there must be a price and quantity differential with the BPL. The NAC has stuck to this approach of the planning commission. While the NAC recommendations leave untouched the objectionable methods of estimation of BPL and APL, they recommend a reduced quantity of only 20 kg of foodgrains instead of 35 kgs to APL sections. While there are a host of steps required to strengthen foodgrains production including increase in government expenditure on rural infrastructure, the argument of non-availability of sufficient foodgrains is misleading. The availability is there, the government has to take the responsibility for expansion of procurement on the basis of a fair and acceptable price to farmers and a larger role for state governments. This is what the central government wants to avoid committed as it is to the free play of the market and a reduction in subsidies. It is not availability but the refusal to allocate sufficient resources which is the crux of the problem.


Thus the NAC wants to legalise the division of the poor into APL and BPL. What is equally objectionable is the suggestion of the NAC to link APL prices with the minimum support price given to farmers. They recommend that the price of grain for APL sections should be 50 per cent of the MSP. Since the government refuses to control the impact of the continued increase in the prices of inputs for farming the cost of production constantly goes up. There is a constant battle by the farmers to get the government to increase MSP prices to a fair level. Although highly inadequate, the central government is forced to increase the MSP almost every year. The farmers commission headed by M S Swaminathan has in fact recommended a 50 per cent profit margin for farmers in the MSP with annual calculations of the increase in the cost of production. While at present the government because of protests and resistance has not been able to raise the central issue price of grains for the APL sections since 2002, the NAC has given them a readymade formula for an annual price increase in the foodgrains meant for the APL sections. The added bonus for the government being that this annual price increase determined by the annual price increase of MSP will now be legal.

By linking MSP hikes to hikes in the price of foodgrains for APL sections by law, the NAC recommendations pits one section of the working people against the other. APL consumers will be against the legitimate demands of farmers against MSP increases as they will see it as a burden on their own budgets. This strategy of the government long opposed by progressive movements, has been accepted by the NAC. Thus along with the divisions of the poor into APL and BPL we have been gifted with an area of potential conflict between different sections of the working people so that the government can go ahead and cut subsidies to both.

The claims about the NAC being the social conscience of this government lie deeply buried in the wholly unsatisfactory recommendations of the NAC on the food security bill. What is the use of a law that legalises discrimination, creates new divisions and conflicts, marginalises the role of state governments while maintaining the present unjust framework related to poverty estimation and identification?

We need to reiterate our demands for a just and full fledged food security act which must have at least the following features:

1. It should be a universal right with the elimination of APL and BPL categories or any other such nomenclature;

2. It should guarantee at least 35 kg of foodgrains per nuclear family;
3. The price of foodgrains must be fixed at two rupees a kilo. The choice should include millets (coarse grains)at one rupee a kilo which are a staple food in many parts of India and are highly nutritious;

4. It must have provisions to ensure food security to pre-school and school going children through a legal guarantee for mid-day meals and allocations for the ICDS;

5. It must ensure the inclusion of a range of other essential commodities, at controlled prices as is being done by several state governments.

People’s Democracy
Vol. XXXIV, No. 45, November 07, 2010


THE Comptroller and Auditor General’s final report which is circulating in the media has substantiated all the charges that Sitaram Yechury, CPI(M) Polit Bureau member and MP, had made in his letter to the prime minister in May 31, 2010. The dimension of the scam for Second Generation (2G) licenses as per CAG's calculations is a mammoth Rs 1,76,000 crore. It has also brought out some new issues that were not known before. Out of the 122 new licenses awarded, 85 were to parties who did not qualify as per DoT's own criteria on eligibility. The other fact that has been brought out is that the issue of legality of awarding licenses was referred to ministry of law by the ministry of communications and IT, who disagreed with the procedure proposed to be adopted. The department of relecommunication (DoT) still went ahead with their course of action in violation of transaction of business rules of the government, which demands that any difference between ministries be resolved at the cabinet level or though an empowered group of ministers.

The loss to the exchequer of Rs 1,76,000 crore is of the order of two per cent of our GDP and roughly 1/3 of our current tax revenue. If this money had been available to the exchequer instead of being gifted to the Unitechs and Swans, imagine what we could have done with this money. To put it in perspective, this is eight times the centre's total health budget and three and a half times the education budget. Imagine how many schools and colleges could have been opened, how many power plants could have been set up, the new roads and rail links we could have built. Instead, a corrupt leadership has connived with a bunch of real estate operators to fleece the nation of another scarce national resource – the wireless spectrum.

The current UPA government is presiding over the biggest loot of our national resources we have ever seen. The mining interests, the real estate operators and carpetbaggers such as those involved in the Commonwealth Games, are expanding Indian capitalism through private loot of public resources. This is primitive accumulation of capital on a grand scale. It is this speculative capital that is running the country today.


Sitaram Yechury's letter had identified three elements in the telecom scam. One was of course giving away 122 licenses at 2001 prices in 2008. In 2001, there were barely four million mobile subscribers as against 300 million subscribers in 2008. With this expansion of the telecom market, using 2001 prices in 2008 was nothing but providing largesses to friends and relations. While the media focussed on this aspect of the scam, there were also two other components. One was the conversion of CDMA licenses to Unified Access Services (UAS), by virtue of which Reliance and Tata entered the GSM based mobile services. The third was the extra spectrum that the existing operators had hogged beyond their originally sanctioned amount. The table below summarises the amounts computed by the CPI(M) as in the letter to the prime minister by Yechury and the computations by CAG.

Approx Amount in Rs
CAG Calculations in Rs
Loss due to 122 licenses for new entrants in 2008
124,000 crore
102,498 crore
Loss due to cross-over licenses permitted to CDMA operators (Dual Technology License)
36,000 crore
37,154 crore
Estimated loss due to excess spectrum occupied by the GSM operators beyond allotted 6.2 MHz
30,000 crore
36,729 crore
190,000 crore
1,76,379 crore

These figures are no longer conjectures of experts or figures computed by people who could be accused of being critical of the government. These are figures worked out by a bunch of government auditors who had access to the files of the department of telecom and have come to their independent conclusions.

Who were the major beneficiaries of the scam? As the CAG Report makes clear, not only were the new licenses for 2G undervalued, but certain parties picked out for special favours. Swan and Unitech, the two real estate companies, were particular favourites. The second set of beneficiaries were the CDMA license holders – Reliance and Tata – who were given cross-over licenses for the bigger GSM market. The third were those GSM operators – Vodafone and Bharati in particular – who were holding spectrum well-beyond their original allotted spectrum.

The CAG report has also substantiated the charges made in the letter that Yechury had written regarding violations of TRAI recommendations and disregarding the advise of other ministries. The report states, “The entire process of spectrum allocation was undertaken in an arbitrary manner. The prime minister had stressed on the need for a fair and transparent allocation of spectrum, and the ministry of finance and the ministry of law and justice had sought for the decision regarding spectrum pricing to be considered by an EGoM. Brushing aside these concerns and advices, the department of telecommunications, in 2008, proceeded to issue 122 new licences for 2G spectrum at 2001 prices, thus flouting all rules and procedures to be followed in a parliamentary democratic set up. The process followed for spectrum allocation was also unfair, considering the fact that DoT did not follow its own guidelines on eligibility conditions, arbitrarily changed the cut off date for receipt of applications post facto and altered the conditions of the FCFS (first-come first-served) procedure it had been following, gave unfair advantage to certain companies over others thus creating an environment which cannot be perceived as transparent and fair.”


As the CAG report makes clear, the manipulations to the stated first-come first-served policies were done to benefit certain parties. It again substantiates what Yechury had brought out in his May letter to the prime minister. The original first-come first-served had the application date as defining who are first-come. On January 10, 2010 this was changed to who fulfils LOI conditions first amongst the parties selected. CAG states, “Thus DoT deviated from its declared FCFS (first-cum-first-served) policy though MOCIT (minister of communications & IT) maintained that it was continuing ‘with the policy for processing of applications’.”

Further, the parties were given only a few hours to fulfil the conditions of the LoI instead of 15 days originally stated. CAG brings out, “It was noticed that 13 applicants were even ready with demand drafts (added: bank draft amounts were of the order of Rs 1651 crore) drawn on dates prior to the notification of cut off date and some had even managed securing bank guarantees. Evidently, these applicants, had advance information about the issue of this notification by DoT which enabled them to take appropriate advance action to draw the DDs and prepare other relevant documents for complying with the LoI conditions in spite of the changed time limit for compliance from 15 days to about half a day”.

Again the CAG notes, “The entire process of putting a cut off date, and then deciding to change it after receiving applications created an artificial demand and competition for obtaining licences in the telecom sector. The subsequent events of informing applicants regarding change in FCFS criteria and simultaneously asking them to collect LoIs from DoT in response to their UAS applications, a large number of applicants complying with detailed requirements of LoI (for which 15 days are allowed as per procedure) within hours ; all reflect a deliberate and unhealthy haste on part of DoT in going ahead with the issue of licences which tended to favour applicants who could proactively anticipate such procedural changes well in time.”

The new story that emerges from the CAG report is that DoT violated its own policy guidelines on eligibility of parties in awarding licenses. The CAG makes clear that most of the parties did not meet the pre-conditions for licenses – their main objectives in the memorandum of association and paid up capital were not in conformity with DoT's eligibility criteria. The report states, “Verification of the files of the DoT and public documents accessed from the ministry of corporate affairs, government of India, New Delhi, revealed that as many as 85 licenses to 12 companies, out of the 122 new licenses issued in January 2008 were granted to those which did not satisfy the eligibility conditions prescribed by DoT. While 72 licenses were given to companies which did not have the stipulated paid up capital at the time of application, 27 licenses were issued to companies who failed to satisfy conditions of main object clause in their memorandum of association and the share holding pattern declared by one company did not meet DoT stipulations.”

Further, Reliance had holdings of more than 10 per cent in Swan, and according to DoT's eligibility criteria should have been disqualified. Not only were they given licenses, in two major circles, eligible bidders were disqualified to allow Swan to secure licenses in these circles.

The picture that emerges from the CAG report is an ugly one. It is a systematic violation of law and procedures at many levels, all for giving away spectrum at a fraction of its market value to favoured parties. The beneficiaries have been identified time and again. Some of them were known to be close to the minister and the then secretary, ministry of communications and IT, during their environmental ministry days.

The question that troubles all of us is why is it that even after multiple agencies of the government have identified the nature and the dimension of the scam, the minister continues to be protected. He himself is on record – this is also verified from the CAG report – that the entire cabinet and the prime minister were fully on board on the decisions he had taken. The CAG report also brings out that the terms of reference of the empowered group of ministers had been modified to take out spectrum pricing from its scope. He not only has been shielded by the UPA government, his nominee, PJ Thomas, who defended the 2G spectrum as telecom secretary, was made the central vigilance commissioner. He is the man now who will verify the validity of the defence of the minister that he made as secretary! The Supreme Court has slammed the CBI for dragging its feet on this issue.

Are we then to take this scam as a lone operation of telecom minister and the exigencies of coalition politics? Or is it true – as Raja himself has stated on numerous occasions – he has the support and the backing of the prime minister and his cabinet on whatever he has done? The prime minister and his cabinet must now come clean on this.

People’s Democracy
Vol. XXXIV, No. 45, November 07, 2010