Brīvais tirgus vai sociālisms priekš korporācijām Indijā

Posted on March 15, 2011


Who is A Raja?

New Delhi: At 47, Andimuthu Raja has come a long way from being a lawyer in rural Tamil Nadu. And even as the end of his stint as Cabinet Minister at the Centre came in a brutal rush after days of stalemate, it was clear that A Raja’s political journey is not over yet.

His party, the DMK, has made clear that while bowing to the dynamics of a political alliance, it will continue to project Raja as victim. “Targeted because he is a Dalit,” said DMK patriarch M Karunanidhi.

Raja is important because he is a Dalit leader, the most prominent Dalit face that the DMK has. Assembly elections are due next year, and the DMK can ill-afford to alienate Dalit voters.

Raja’s being Dalit got him early breaks in his political career, like becoming Cabinet Minister at the age of 35 – in the NDA government in 1999. And he never looked back holding several portfolios both in the NDA and UPA regimes at the Centre. He became Telecom Minister in May 2007. And again in 2009, despite 2G scam allegations and the high-profile Dayanidhi Maran being in the race for the post, for being a rare Dalit DMK leader and for his loyalty to M Karunanid

A Raja was born in May 1963 in Perambalur, Tamil Nadu, and likes to reminisce that he had to go to Trichy for an education as there were no facilities nearer home. In Trichy, Raja got a BSc and then his law degrees.

As an interesting aside, Raja writes poetry in Tamil. His literary skills are believed to have got him close to Karunanidhi, who too is a poet and writer.

Raja was a student leader of the Dravidar Kazhagam, the parent body of the DMK. From a block level leader he rose quickly and was first elected to the Lok Sabha in 1996. Raja earlier represented Perambalur and now represents the Nilgiris constituency in Tamil Nadu and this is his fourth term in Parliament after being re-elected in 2009.

His catchphrase in that election campaign was “Oru kilo arisi oru rupa, oru hello 50 paisa” (One kg rice one rupee, a hello on the phone 50 paisa). As he resigned today, Raja again said, “I brought revolution in the Telecom sector.”

The 2G scandal

Raja hit headlines for the wrong reasons ever since he allocated license for the 2G bandwidth in 2007 soon after he took over the coveted portfolio, adds PTI.

Raja has been facing criticism after he decided in 2007 to bring in new players and give licenses and spectrum as per the existing policy of “first-cum-first-serve” basis and rejected demands for auctioning.

After the licenses were given January  2008 at 2001 prices of Rs. 1,658 crore, two of the telecom operators who got spectrum sold part of the equity at much higher premium.

Unitech sold to Telenor of Norway and Swantelecom sold to Etisalat of the UAE. This led to controversy as it was felt that the spectrum allocation had led to a huge loss to public exchequer.

Various agencies including CBI, CVC and CAG started independent investigations into the alleged scam.

The CAG has put the loss at Rs. 1.40 lakh crore on the basis of new licences of 2008 and Rs. 36,000 crore go giving licenses to existing operators for giving additional spectrum beyond contractual limit of 6.2 Mhz.

Raja had been pleading innocence ever since he was targeted by the Opposition and has been maintaining that he had just followed the procedures laid down by his predecessors.


  • 2G licenses issued to private telecom players at throwaway prices in 2008
  • CAG: Spectrum scam has cost the government Rs. 1.76 lakh crore
  • CAG: Rules and procedures flouted while issuing licenses



  • Entry fee for spectrum licenses in 2008 pegged at 2001 prices
  • Mobile subscriber base had shot up to 350 million in 2008 from 4 million in 2001


  • Rules changed after the game had begun
  • Cut-off date for applications advanced by a week
  • Licenses issued on a first-come-first-served basis
  • No proper auction process followed, no bids invited
  • Raja ignored advice of TRAI, Law Ministry, Finance Ministry
  • TRAI had recommended auctioning of spectrum at market rates


  • Unitech, Swan Telecom got licenses without any prior telecom experience
  • Swan Telecom given license even though it did not meet eligibility criteria
  • Swan got license for Rs. 1537 crore, sold 45% stake to Etisalat for Rs. 4200 crore
  • Unitech Wireless got license for Rs. 1661 crore, sold 60% stake for Rs. 6200 crore
  • All nine companies paid DoT only Rs. 10,772 crore for 2G licences

Corporate socialism’s 2G orgy

The Union budget writes off Rs.240 crore in corporate income tax every single day on average — the same amount leaves India each day in illicit fund flows to foreign banks.

In six years from 2005-06, the Government of India wrote off corporate income tax worth Rs.3,74,937 crore — more than twice the 2G fraud — in successive Union budgets. The figure has grown every single year for which data are available. Corporate income tax written off in 2005-06 was Rs.34,618 crore. In the current budget, it is Rs.88,263 crore — an increase of 155 per cent. That is, the nation presently writes off over Rs.240 crore a day on average in corporate income tax. Oddly, that is also the daily average of illicit fund flows from India to foreign banks, according to a report of the Washington-based think tank, Global Financial Integrity.

The Rs.88,263 crore covers only corporate income tax write-offs. The figure does not include revenue foregone from higher exemption limits for wider sections of the public. Nor higher exemptions for senior citizens or (as in past budgets) for women. Just income tax for the big boys of the corporate world.

Pranab Mukherjee’s latest budget, while writing off this gigantic sum for corporates, slashes thousands of crores from agriculture. As R. Ramakumar of the Tata Institute of Social Sciences (TISS) points out, the revenue expenditure on that sector “is to fall in absolute terms by Rs.5,568 crore. Within agriculture, the largest fall is to be in crop husbandry, with an absolute cut of Rs.4,477 crore.” Which probably signals the death of extension services, amongst other things, in the sector. In fact, “within economic services, the largest cuts are to be in Agriculture and Allied Services.”

Even Kapil Sibal cannot defend the revenue losses as notional. For the simple reason that each budget sums up these numbers clearly in tables within a section called ‘Statement of Revenue Foregone.’ If we add to this corporate karza maafi, revenue foregone in customs and excise duty — also very largely benefiting the corporate world and better off sections of society — the amounts are stunning. What, for instance, are some of the major items on which revenue is foregone in customs duty? Try diamonds and gold. Not quite aam aadmi oraurat items. This accounts for the largest chunk of all customs revenue foregone in the current budget. That is, for Rs.48,798 crore. Or well over half of what it takes to run a universal PDS system each year. In three years preceding this one, the customs write-off on gold, diamonds and jewellery totalled Rs.95,675 crore.

Of course, this being India, every plunder of public money for private profit is a pro-poor measure. You can hear the argument already: the huge bonanza for the gold and diamond crowd was only to save the jobs of poor workers in the midst of a global economic crisis. Touching. Only it didn’t save a single job in Surat or elsewhere. Many Oriya workers in that industry returned home jobless to Ganjam from Surat as the sector tanked. A few other workers took their own lives in desperation. Also, the indulgence for industry predates the 2008 crisis. Industry in Maharashtra gained massively from the Centre’s Corporate Socialism. Yet, in three years before the 2008 crisis, workers in the State lost their jobs at an average of 1,800 a day.

Returning to the budget: There’s also the head of ‘machinery’ with its own huge customs duty concessions. That includes surely, the crores of rupees of sophisticated medical equipment imported by large corporate hospitals with almost no duty levied on it. The claim of providing 30 per cent of their beds free of charge to the poor — something that has never once happened — is an excuse to dole out these ‘benefits’ (amongst others) to that multi-billion rupee industry. Total revenue foregone on customs duty in the present budget: Rs.1,74,418 crore. (Which does not include export credit-related numbers).

With excise, of course, comes the standard claim that revenues foregone on excise duty translate into lower prices for consumers. There is no evidence provided at all that this has actually happened. Not in the budget, not elsewhere. (Sounds more like the argument now making the rounds in some Tamil Nadu villages that nothing was looted in the 2G scam — that’s the money translating into cheaper calls for the public). What is clearly visible is that the write-offs on excise directly benefit industry and business. Any indirect ‘passing on’ to consumers is a speculative claim, not proven. Revenue foregone on account of excise duty in this budget: Rs.1,98,291 crore. Clearly more than the highest estimate of the 2G scam losses. (The preceding year: Rs.1,69,121 crore).

Also fascinating is that the same classes benefit in multiple ways from all three write-offs. But how much does revenue foregone under corporate income tax, excise and customs duty add up to across the years? We have baldly stated budget figures for six years starting 2005-06, when the total was Rs.2,29,108 crore. To the current budget where it is more than double that sum at Rs.4,60,972 crore. Add up the figures since 2005-06 and the grand total is Rs.21,25,023 crore. Or close to half a trillion U.S. dollars. That is not merely 12 times the 2G scam losses. It is equal to or bigger than the Rs.21 lakh crore sum that Global Financial Integrity tells us has been siphoned out of this country and illegally stashed away in foreign banks since 1948 ($ 462 billion). Only, this loot has happened in six years starting 2005-06. The current budget figure for these three heads is 101 per cent higher than it was in 2005-06 (see Table).

Unlike the illicit fund flows, this plunder has a fig leaf of legality. Unlike those flows, it is not the sum of many individual crimes. It is government policy. It is in the Union budget. And it is the largest conceivable transfer of wealth and resources to the wealthy and the corporate world that the media never look at. Oddly, the budget itself recognises how regressive this trend is. Last year’s budget noted: “The amount of revenue foregone continues to increase year after year. As a percentage of aggregate tax collection, revenue foregone remains high and shows an increasing trend as far as corporate income tax is considered for the financial year 2008-09. In case of indirect taxes, the trend shows a significant increase for the financial years 2009-10 due to a reduction in customs and excise duties. Therefore, to reverse this trend, an expansion in the tax base is called for.”

Rewind a year further. The 2009-10 budget says the same thing in almost identical words. Only the last line is different: “Therefore it is necessary to reverse this trend to sustain the high tax buoyancy.” In the current budget, the paragraph is absent.

This is the government that has no money for a universal PDS or even an enhanced one. That cuts anyway meagre food subsidies from the largest hungry population in the planet. That, at a time of rising prices and a great food crisis. In a period when its own economic survey shows us that the daily average net per capita availability of foodgrain for the five year period 2005-09 is actually lower than it was in 1955-59 — half-a-century ago.

Materiāls sagatavots izmantojot un materiālus.

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