2G spectrum scam

The 2G spectrum scandal was an Indian telecommunications scam and political scandal in which politicians and government officials under the Indian National Congress (Congress) coalition government undercharged mobile telephone companies for frequency allocation licenses, which they used to create 2G spectrum subscriptions for cell phones. The Government chose NM Rothschild & Sons to design a first-of-its-kind e-auction mechanism in the world, a US$2.27 billion landmark deal, in which they got at least Rs 30.5 crore in commission. The difference between the money collected and that mandated to be collected was estimated by the Comptroller and Auditor General of India at ₹1.76 trillion (US$26 billion), based on 2010 3G and BWA spectrum-auction prices. In a chargesheet filed on 2 April 2011 by the Central Bureau of Investigation (CBI, the investigating agency), the loss was pegged at ₹309,845.5 million (US$4.6 billion). In a 19 August 2011 reply to the CBI, the Telecom Regulatory Authority of India (TRAI) said that the government had gained over ₹30 billion (US$450 million) by selling 2G spectrum.Minister of Communications & IT Kapil Sibal said in a 2011 press conference that "zero loss" was incurred by distributing 2G licenses on a first-come-first-served basis.

On 2 February 2012, the Supreme Court of India ruled on a public interest litigation (PIL) related to the 2G spectrum scam. The court declared the allotment of spectrum "unconstitutional and arbitrary", cancelling the 122 licenses issued in 2008 under A. Raja (Minister of Communications & IT from 2007 to 2009), the primary official accused. According to the court, Raja "wanted to favour some companies at the cost of the public exchequer" and "virtually gifted away important national asset[s]." The zero-loss theory was discredited on 3 August 2012 when, after a Supreme Court directive, the government of India revised the base price for 5-MHz 2G spectrum auctions to ₹140 billion (US$2.1 billion), raising its value to about ₹28 billion (US$420 million) per MHz (near the Comptroller and Auditor General estimate of ₹33.5 billion (US$500 million) per MHz).

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