THE CONGRESS Party of Indian prime minister Manmohan Singh, which leads the federal coalition, is reeling under its biggest ever corruption scandal involving the questionable auctioning of telecommunications licences by a senior minister.
The ignominy over the corruption outrage, which could cost $39 billion (€28.8 billion) – an amount roughly equivalent to India’s annual defence budget – has strained governmental ties with a crucial coalition ally and threatened to disrupt the passing of a raft of reform Bills in the ongoing parliament session.
In its report tabled in parliament yesterday, the corruption watchdog, the Comptroller and Auditor General, declared that second-generation (2G) spectrum licences for mobile phones were sold in 2008 at discounted rates to select firms in an “arbitrary, unfair and inequitable manner”.
The watchdog declared its $39 billion estimate to be speculative, based as it was on the telecom sector’s exponential growth. India is the world’s fastest growing market for mobile telephones, adding more than 14 million subscribers each year.
The furious row over what has come to be known as the “2G scam” forced telecommunications minister Andimuthu Raja to resign at the weekend amid calls from the opposition for his arrest.
Mr Raja remains defiant, claiming to have done no wrong.
In its report, the watchdog revealed Mr Raja’s ministry had flagrantly flouted rules while handing out 122 2G licences to operators, some of which did not qualify to bid for the contracts.
Deputy comptroller Rekha Gupta declared 85 of the 122 licences issued in 2008 were to ineligible companies.
Even by India’s low standards of probity and honesty in public life, the corruption surrounding the 2G scandal has shocked India and has spurred the Hindu-nationalist-led opposition to demand a parliamentary inquiry into the affair.
India has slipped three places to 87th place in Transparency International’s (TI’s) Corruption Perception Index released last month, with financial scandals linked to the recently concluded Commonwealth Games contributing to this low rating in a survey of 178 countries. “India has gone down in the [corruption] ranking as well as integrity score, and this is a matter of concern and regret,” TI India head PS Bawa said.
It appeared the level of governance has not improved despite India having a skilled set of administrators, he added.
With an “integrity” score of 3.3, India was behind neighbouring China, ranked in 78th place, based on the extent of corruption and the respective government’s ability to punish and contain it. In 2009 India was 84th and China was 79th. An integrity score of zero on a scale of 0-10 indicates the highest level of corruption, and 10 the lowest.
The TI report, based on 13 surveys throughout the year by bodies such as the World Bank, European Union and International Monetary Fund, revealed that Denmark, followed by equally ranked New Zealand and Singapore, had the lowest levels of corruption.
In South Asia, Bhutan was the best performer at 37th, with an integrity score of 5.7, while Nepal ranked 146th, Pakistan 143rd and Bangladesh 134th. Afghanistan, with an integrity score of 1.4, was ranked 176th – just two positions above Somalia and Burma.
A TI survey between November 2007 and January 2008 revealed millions of Indians living below the poverty line – earning $1 or less a day – had paid an estimated $220 million in bribes over a three-month period to avail of basic public services – policing, healthcare and education. The police were the most corrupt service, with two out of every five of the 22,728 people randomly surveyed seeking its help through bribes.