CAG REPORTS. Govt suffered ₹12,500-cr loss as telcos under-reported incomes

The Comptroller and Auditor General (CAG) of India on Friday said the government has suffered a loss ₹12,488.93 crore, as six private telecom service providers (PSPs) including Bharti Airtel, Vodafone, Reliance Communications and Idea Cellular understated gross revenue by ₹46,045.75 crore, from 2006-07 to 2009-10.

The verification of records of six PSPs indicated total understatement adjusted gross revenue (AGR) of ₹46,045.75 crore for the period from 2006-07 to 2009-10, on account of short/non-payment of ₹3,752.37 crore on licence fee (LF) and ₹1,460.23 crore on spectrum usage charge (SUC), and interest of ₹7,276.33 crore from these companies, the CAG said.

“Hence, it is recommended that proper monitoring of Controllers of Communications Accounts (CsCA) by Department of Telecom (DoT) is required for uniform/systematic verification of deduction claims at CsCA level,” it said in the report.

DoT also needs to strengthen its internal audit mechanism to ensure that verification of deductions by CsCA is checked regularly, it added.

Telecom Minister Ravi Shankar Prasad said his ministry will go for a special audit, by setting up a public accounts committee to check on the revenue sharing regime, in which telecom licensees are required to share a percentage of their AGR with the government. “Though the CAG report will go to the public accounts committee, whose recommendations will be final after approval by the House, the Department will nevertheless take a special audit, authorised under the licence conditions, to verify whether any outstanding due is legitimately required to be paid by the operators,” Prasad said.

“The present audit that we undertake will be for three years — 2008-09 to 2010-11. I am very clear that whatever revenue is legitimately required to be paid, must be paid,” the Telecom Minister added.

Telecom industry bodies COAI and AUSPI said, “We would like to clarify that matters relating to interpretation of ‘Gross Revenue/AGR’ of telecom companies, for the purpose of calculation of license fees, are under litigation in various judicial forums including the TDSAT, high courts and the Supreme Court. The issues pointed out by the CAG pertain to those disputes, which have either been settled or stayed by various courts.”

Meanwhile, the CAG has also said that adjustment of one-time entry fee paid by telecom companies, whose licences were cancelled by the Supreme Court against the spectrum price they paid in 2012-13, deprived the exchequer of ₹5,476.3 crore.

The government, in 2012, had decided to adjust the licence fee paid by companies whose permits were cancelled in the 2G case, the CAG said in its report on the Communications and IT sector. The report states that the government continued to allocate wireless frequencies in the spectrum band of 3.3-3.4 Ghz without auction, free of cost, despite recommendation from the regulator TRAI, in violation of the apex court judgment that said spectrum should be allocated through auction.