Post-2G, The First Reform We Need Is Total Overhaul Of Legal-Judicial System

The shocking 2G scam verdict, where a Special Court judge completely exonerated the main accused, A Raja, and nearly a score more on grounds of lack of adequate evidence, is a pointer to the one reform we need as of yesterday. More than economic, social or political reforms, what India really needs is complete and total reform of the police, crime detection, legal and judicial system where it is capable of delivering justice in reasonable time.

The verdict of ‘not guilty’ delivered by Judge O P Saini on 21 December for Raja (communications minister in United Progressive Alliance government), M K Kanimozhi (daughter of Dravida Munnetra Kazhagam chief M Karunanidhi), two bureaucrats associated with Raja, and 15 businessmen or senior executives, is now looking like a bigger scandal than the original 2G scam. How can a crime, for which the Supreme Court itself entered the picture and cancelled 122 licences on grounds that they were arbitrarily and illegally allotted, suddenly not have anyone guilty for it?

The 2G case is unique for we had all the necessary circumstantial evidence upfront: we had a crime (arbitrary and capricious allotment of 2G licences and under-priced spectrum), a key suspect standing with the smoking gun (Raja), and several colleagues who had conversations with him advising him against doing what he intended to do (Manmohan Singh, P Chidambaram and the Finance Secretary, among others, who wanted spectrum to be sold by auction). This is thus a case where several political accomplices should have also been indicted, but we have ended up with a verdict which says there is no proof against anyone.

Kapil Sibal, Raja’s successor in the ministry and the man who invented the “zero-loss” theory, is cock-a-hoop. He has been demanding apologies from all and sundry, including the Bharatiya Janata Party and the former Comptroller and Auditor General (CAG) Vinod Rai, for tomtomming the loss figure of Rs 1.76 lakh crore. Actually, he is the one who should apologise for it was his own government which – after the scam – decided to adopt the auction route.

Sibal now claims that the idea all along was to make telephony cheap, and alleges that high-priced spectrum is now leading to losses for telecom companies and resulting in more bad loans for banks. This is a distortion of the truth. Raising teledensity has been a government policy since 1999, but the conversations in the UPA around 2007-08 revolved around discovering a better price for spectrum, now that reasonable teledensity had been achieved. The idea that spectrum must be given out cheap at 2001 prices in order to keep call rates low is an after-thought. It’s like a fake Robinhood, after being caught with the loot, claiming that he intended to give the benefits to the poor.

One can argue about the high reserve prices of spectrum, but Sibal’s suggestion that the telecom industry’s woes relate to high auction prices is also a half-truth. The real reason why the industry is struggling is the entry of a new, well-endowed player, Reliance Jio, with super-low initial tariffs. It has very little to do with high spectrum auction prices, though that is an issue that needs dealing with. Even more important, Jio’s entry suggests that low prices for the common man can be achieved with higher investments, rather than just low spectrum prices. Yes, spectrum prices discovered through auctions have gone a bit too high, but they are not the only reason for the industry’s travails.

The mistake was to focus on the revenue loss, and not the crime. It’s like speculating on the net worth of a murder victim instead of focusing on the crime itself.

Despite the CAG’s estimates of notional revenue losses, the real crime was the arbitrariness of the procedures adopted by Raja to favour his business friends, not the price at which the licences were given out. Governments have the right to give out licences free, if they think it will do good, but they have no right to do this by behaving non-transparently and arbitrarily, where the intention is to favour a few.

This is the real crime, and this crime was hardly beyond the capacity of the Central Bureau of Investigation (CBI) to prove, with both the CAG report of Vinod Rai and the Supreme Court judgement of 2012, which cancelled 122 licences, giving the CBI enough ammo to find the evidence needed in that direction. By focusing on the losses, it lost the plot.

What the 2G scam case proves is that investigating agencies looking at white collar crimes must not only understand what the real crime is and go after the evidence needed for it, but they must also ignore things that relate merely to policies or notions of losses that may excite the media or the public.

Can the damage be undone? Surely, yes. While the Saini verdict surely needs to be appealed, the CBI needs to file a new case that focuses on the arbitrariness of the process, and not so much on the losses suffered by the exchequer. If possible, it should look for links between the arbitrary decisions, and the financial trail that connects policy decisions and its beneficiaries. Even if the financial trail has now gone cold, the arbitrariness is not something that can easily be proven. The CBI has to make amends, and the government needs to put all its resources to enable the CBI to deliver this time.

And yes, the criminal justice system needs a complete and total overhaul. Right now it is a scandal bigger than 2G.

(This article was first published in DB Post)