Explained Facts CAG Rs.46000 Crore Telecom Scam
The Congress on Thursday charged the BJP Government, PM Narendra Modi administration of creating conditions that would allow six private telecom companies to avoid paying Rs 45,000 crore it owed the government.
How and When Rs. 46,000 Crore Scam happened?
CAG initiated an audit of the six telecom companies for four years from 2006-07 to 2009-10 at the instructions of the Congress-led UPA government. It specifically looked at underreporting of income and non-uniform method of accounting adopted by various telecom companies and consequent lack of obligation to pay outstanding license fee and Spectrum Usage Charges (SUC).
The issue dates back to the previous National Democratic Alliance government under former prime minister Atal Bihari Vajpayee (1998-2004).
Under the New Telecom Licensing Policy implemented in 1999 (NTP 1999), then telecom minister Pramod Mahajan evolved a system of revenue sharing.
Telecom companies were to operate under a license, the fee for which was to be decided on the basis of the adjusted gross revenue (AGR). Cellular service providers had to pay spectrum usage charges (SUC) in addition to the license fee. This amount was linked to income of cellular companies.
Since this income is considered a part of the Consolidated Fund of India, it fell within the purview of CAG to enquire whether the government had received its complete and correct share of revenue.
The CAG started an audit of the six telecom companies for four years (2006-07 to 2009-10) after the United Progressive Alliance asked for one. It looked specifically at underreporting of income and different methods of accounting adopted by telecom companies. Telecom companies challenged the right of the CAG to audit private companies. The matter went to the Supreme Court which ruled in April 2014 that the CAG had the jurisdiction to audit these companies.
The CAG submitted its report in March 2016.
Six telecom companies that were audited by CAG are
According to the Congress, the CAG found understatement/underreporting of income by these six companies to the tune of Rs 46,045.75 crore in the four years (2006-07 to 2009-10).
If this sum is worked out in terms of the percentage of revenue owed to the government it amounts to Rs 12,488.93 crore. This does not include penalty and taxes.
The Congress claimed after weighting this amount with increase in telecom companies’ customer base, increase in revenue share, and other income from 2010-11 to 2015-16, this figure could be more then Rs 45,000 crore.
Congress party said that instead of making efforts to recover the money, the Modi government has opted for an alternative re-evaluation of these figures by Telecom Ministry through chartered accountants who are empanelled with them.
The Congress says this is the clearest indication that the Modi government wants to delay the recovery of this money and possibly write it off altogether; and wants to rubbish the findings of the CAG.
Comptroller and Auditor General of India, in its report presented in Parliament in March this year, said Reliance Communications, Tata Telecom, Vodafone, Airtel, Idea and Aircel under reported their adjusted gross revenue by Rs 46,045.75 crore, leading to a loss of Rs 12,488.93 crore to the exchequer from 2006 to 2010
According to the CAG’s report, the financial impact due to understatement of the adjusted gross revenue stood at: ₹3,728.54 crores for Reliance Communications; ₹3,215.39 crores for Tata Teleservices; ₹2,651.89 crores for Airtel; ₹1,665.39 crores for Vodafone; ₹964.89 crore for Idea and ₹262.83 crore for Aircel.
In June, the CAG submitted documents related to operators’ accounts to the communications ministry
Currently, six auditors empanelled by the CAG have been auditing the books of the operators
The communications ministry said it would conduct a special audit of the operators’ book for three years — 2009-10 to 2010-11
Congress party’s chief spokesman Randeep Surjewala alleged following at a joint press conference with party spokespersons Shaktisinh Gohil and R P N Singh.
In its report submitted this year, the CAG found an alleged understatement/underreporting of income by the six companies of Rs. 46,045.75 crores in the four years.
“Resultantly, the CAG found that there was an amount of Rs. 12,488.93 crores, which remains un-recovered by the government. This does not include penalty, if any, and other relevant taxes.”
He said that although there has been considerable increase in business, consumer base and income, even if loss of exchequer is calculated on the same formula for the years 2010-11 to 2015-16, this figure would be Rs. 45,000 crores plus.
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Friday, July 8, 2016
Tags – Rs. 46,000 Crore Telecom Scam Fraud Facts
08 July 2016
Explained Facts CAG Rs.46000 Crore Telecom Scam