The 2G scam which, according to the Comptroller and Auditor General of India had costed the government exchequer a loss of Rs.1.76 lakh crore, is assumed today to have never happened after the recent verdict which acquitted all the 18 accused of the case by the CBI Court. While we all have been discussing about whether the scam happened, how did all accused go scot-free, how weak our judicial system is, etc. we almost forgot about the impact of this verdict on the Foreign Direct Investments in India.
Before discussing about the FDI in India, let me get you a brief run-through on the alleged 2G Scam. Spectrum and Coal are one of the limited available commodities in India. In 2008, with the growing demand for mobile phones and considerably high call rates, the market was ready for any foreign investor to invest and reap good benefits. Sensing this, the Telecom Ministry sold 122 licenses in 22 circles in India at 2001 prices despite recommendations by the government in 2007 to revise the prices. While leaving the pricing, the spectrum was offered to companies which weren’t eligible for getting a telecom license. Later on these companies like Swan Telecom (sold stake to Etisalat), Unitech Group (sold stake to Telenor) and Shyam Group (Russian based Sistema Telecom) which invited foreign investment in the telecom industry. On the basis of the 2G spectrum, 3G spectrum was in great demand, which attracted a Public Interest Litigation (PIL), thereby Supreme Court went on to cancel all licenses issued by the then Telecom Minister A Raja in 2012. Five years later, the CBI court pronounces a verdict which states that some parts were missing and the scam actually was imagined (layman terms) and due to lack of evidence, all accused are free. 10 years later, all companies who were a part of this realize that there wasn’t any justice at all. The money they lost in buying the spectrum, fines paid to the government were not justified. The Ruias and Loop Telecom have already in process of demanding a refund to the losses they have witnessed due to this entire nexus. Is the government going to refund them? This should be the case as the scam never happened.
Telecom Sector accounts to 8% of the total Foreign Direct Investment in India — In 2015-16 Financial Year, an FDI inflow of Rs.8, 637 crore which rose to Rs.37, 435 crore in 2016-17 Financial Year was seen in India. The first quarter of the Financial Year 2017-18 saw an FDI inflow of Rs.38,926 crore in India. After the pronounced verdict by the CBI court, the international media has started its discussion on the verdict, which is surely going to raise eyebrows of any investor in India. With a 64% increase in FDI since the launch of Make In India in October 2014, how is the government going to justify its stance of making India a more business friendly nation without offering proper justice to their investments. Scam never happened, you cross your heart and say that loud. If it never happened then why did the Supreme Court cancel 122 licenses in 2012? This would be the major question by the all the potential investors in their board rooms to secure or rather make investments in India.
Now who is responsible for this? The Indian National Congress and the DMK celebrated the verdict as a proof of their innocence. They are celebrating as if nothing ever happened. The statements by the leaders of these parties (in good sound English) claim a fabrication of evidence. The BJP which rose to power on the allegations of corruption over the UPA in 2014 couldn’t prove a single piece of evidence in the 2G scam. We Indians are responsible for the 2G scam. We trusted our leaders, voted them with confidence to make India, a corruption free country; rather we Indians became fools in the entire process. FDI has been continuously increasing; the ease of doing business ranking has increased by 30 positions from 130 to 100; with 60% of Young population and a good market for cheap and quality labour, why couldn’t the government prove anything? If the Supreme Court had cancelled licenses, then it was on what basis? Do we have an answer to it? No. Scams like the previous alleged ones like the Military Jeep Scam, Bofors Scam, Coal Scam, etc. would be a part of our Independent history where there is no justice for the common man. Kanoon sachme andha hota hain (Law is seriously blind).
Any foreign investor would consider this as a point before investing, which is going to impact our jobs. Mine and your jobs. We welcome this verdict with our closed hands.