India’s PM dragged into $31bn telecoms scandal

A huge telecoms scandal in India that has already resulted in the sacking of a high-ranking government minister has now implicated Prime Minister Manmohan Singh.

Earlier this week, India’s telecoms minister A Raja resigned after being accused of deliberately under-selling access to the country’s 2G wireless spectrum in 2007 and 2008. Official estimates place the cost of his alleged actions at $31 billion.

Raja is accused of selling spectrum licenses on a ‘first come, first served’ basis, with total revenue from the 2G auction amounting to just $2 billion. In contrast, 2010’s 3G spectrum auction drew $15 billion in sales.

Prime Minister Singh has been drawn into the scandal after opposition party MP Subramian Swamy claimed he wrote to Singh in early 2009 asking for a full investigation into the spectrum auction. Swamy says Singh only turned down his request in March 2010, citing a lack of evidence.

India’s Supreme Court yesterday publically criticised Singh for "alleged inaction", before filing an affidavit requesting Singh to formally explain why he apparently never investigated Raja’s actions.

The Supreme Court cannot remove Singh from his role, but observers say any ruling against him will damage both his and India’s ruling party’s image. "Prime Minister Manmohan Singh is heading for the most crucial time of his political career," S Chandrasekharan, director of the Indian think tank South Asia Analysis Group, told the Wall Street Journal. "His reputation and the integrity of the Congress party have been dented."

Telecoms minister Raja’s resignation on Sunday came as the latest development in a major anti-corruption drive being led by India’s Central Bureau of Investigation. 

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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