Nira Radia, “Spectrum Raja” & Environmental Clearances

During his tenure as Environment Minister, it appears that Andimuthu Raja helped Nira Radia, head of a public relations company to get environmental clearance for some housing projects launched by two corporate giants.

Radia first got in touch with Raja in January 2006, when Raja was the Environment Minister. Radia struck a big deal by getting environmental clearance for the pan-India project of housing development for the two big companies. Radia’s clout was enormous in the Environment Ministry.

It is also suspected that since environment ministry was with DMK for 10 years (prior to Raja, T R Baalu was the environment minister) before Jairam Ramesh took over, Radia may have been active during Baalu's tenure as well.

If one can get names of the specific projects wherein Radia played some role, one can get those environmental clearances reviewed.

Left parties are demanding a thorough investigations into the 2G allocation scam of 2007-08. Director General Investigations (Income Tax) has given the relevant documents to CBI which is probing the 2G scam. The CBI, however, failed to question Radia allegedly under pressure from higher authorities. Radia reportedly fled the country. The case of Telecommunications Minister Raja as per reported estimates has cost the exchequer a whopping figure of Rs 64,000 crore is yet to reach its logical end. The scandal in the matter of spectrum 3G is yet to come to light fully. Raja's Boss, Tamil Nadu chief minister M. Karunanidhi, came to Delhi and met Congress president Sonia Gandhi and Prime Minister Manmohan Singh. Raja is a member of the Dravida Munnetra Kazgham (DMK) which is crucial to the life of the Manmohan Singh government.

Raja's underselling of the 2G spectrum (a designated part of the airwaves for use by mobile phone operators), which caused a loss of Rs 22,466 crore as per the CBI's estimate has come to light. Raja reversed Dayanidhi Maran’s decisions and decided not to auction the spectrum, but sold it on a first-come-first serve basis. It was not at 2007 prices but at the 2001 price of Rs 1,650 crore.

Some 584 million Indian mobile subscribers are to gain access to data-rich services as Government-run 3G auction finally comes to an end. Its predecessor, 2G spectrum, is basically used for voice and SMS. 3G can carry high-speed data services such as the all-important mobile internet. India has more than 584 million mobile connections and only 40 million fixed-line connections.

Government could rake in £8.3 billion in licence fees from the 3G auction. The Central Vigilance Commission has belatedly decided to investigate the 2G allocation. Under the terms of the original agreement, 120 2G licences were handed out that raised a mere £1.3 billion for the Indian exchequer. Indian government lost out on more than £7 billion in licence fees.

A windfall tax has been fixed for major 2G spectrum operators, levying a potential £5.3 billion in fees for these operators who have been using more 2G spectrum than they were allocated. If one adds this figure to the estimated £8.3 billion raised from the 3G auction, it makes £13.6 billion for the Government. Winning 3G bidders have to pay that money within ten days. Last month, a record 20.31 million subscribers were added to the installed base of Indian mobile users. In December 2008 a Government report on India surmised that a 1 per cent higher mobile subscription rate would mean a £140 rise in GDP per capita. The £13.6 billion of the 2G windfall tax and 3G auction revenue means India’s GDP has instantly risen by around 3.5 per cent. All this is likely to lead to offers of talk time at 0.1 rupees per second. As to the 2G beneficiaries, the full price is yet to become fully visible.

Sadly, while the scam was debated in the parliament, parliamentarians have so far failed to debate how the industrialists influenced allocation of ministries to their favorites.

Most people do not understand use spectrum but do not understand the scam but they would understand misplaced environmental clearances which Raja engineered in his previous incarnation.