Sunday, November 14, 2010

That's all, Your Honour! : Nov.7-13

1. Now, when you hear all over the TV that the US President has signed deals worth $10billion with Indian companies and government, you would instantly expect them to show what the actual deals were, no? However, irrelevant trivia, directionless discussions dominated the entire 3 day trip. Thankfully, print media did give us details about these deals, and quite frankly it was an incredibly proud moment for many folks - The President of US coming to India to secure jobs for people of his country :). Obama not mentioning Pakistan at the Taj drew some flak in the country. Thankfully, the next day in a town hall meeting with the students - a girl asked him how come the US helps Pak so much despite knowing of its support to Pakistan (the electronic media went gaga over this question too, but that's for a later day!). And then Obama started a long winded answer, where most of us did now understand where he started and where he ended (this was the case with most of his answers - dull, dreary, long, no direction) ! The substantial part of the answer being this - It is a strategically important country in the region. And is also a victim of its own terrorism. (same old stuff). And then says a stable Pak is in the interest of India. Well agreed, but shouldn't Pak first realise a stable Pak is in the interest of Pak! And therefore work towards it? Why is this India's responsibility?

And the next day, while addressing the joint session of Parliament, Obama says they would like to see India as a permanent member in an expanded UN Security Council. And then again our TV media went gaga - only realising later that this came along with some caveats. This article in Hindu analyses this announcement correctly - India is expected to support US in places like Iran; play a larger role in Mynammar etc. Though the announcement is significant - there is really nothing substantial about it. Ofcourse, for the TV media - it is the significance that matters, not the substance :D. Ohh, then he also asks Pak to take steps to bring the planners of 26/11 attacks to Justice! For most of the time, all they cared were about how Michelle Obama "wowed" the nation with her dances (with children). Anyways, our takeaway from this trip is the relaxation of further sanctions imposed on us - now there will be much more freer transfer of high-end technology. Again, what an incredibly proud moment for so many Indians - US President coming to India to secure jobs for his citizens :).

2. Within an hour of Obama leaving the country, Ashok Chavan's resignation as the CM of Maharashtra, because of his involvement in the Adarsh Society Housing Scam, was "accepted" by Sonia Gandhi. He then went and submitted it to the Governor. Finding a replacement took time, because almost all leaders were involved in this! Vilasrao Deshmukh and Sushil Kumar Shinde were also involved - but incidentally, they will get to stay as Union Ministers. Another Union Minister, Prithviraj Chavan was chosen as the Chief Minister of Maharashtra. Turns out, he also owns a flat elsewhere, meant for weaker sections of the society! Either way, the 4th CM in 5 years and only time will tell if he will complete his term! Chance pe Dance - NCP also changed its deputy CM ! Ajit Pawar, cousin of Hon. Shri. Sharad Pawar was "elected" as the Deputy CM unseating Chagan Bhujbal !

3. The Comptroller and Auditor General of India (CAG) submitted his report on the 2G scam to the President. And he said the Union Minister, Shri A.Raja has caused the exchequer a loss of Rs. 1,76,000 crores through his decisions! To give you a perspective of this number - the defence budget of India last year was Rs. 1,40,000 crores !! Raja and his party DMK, however insist he has done no wrong - saying he just followed the 1999 policy and rates! You see, here's where people don't understand stuff. Why would anyone in their right mind use the 1999 rates in 2008 too?? Why? Just why?? More importantly, who? (and "telecom firms" is not the answer we are looking for. we want names of those who benefitted). Guess what - Raja even defied the PM's orders on this. Yes, you read it right - he defied the Prime Minister and yet he gets to keep his job! In the meanwhile, Jayalalitha jumps into the fray and offers her support to the UPA if Raja is sacked - for which the Prime Minister responds by saying it is for the "high command" of the Congress to take note of this! Strange, given that one would assume the Prime Minister of the country would also be part of the "high command"! That's all, your honour!


CodeNameV said...

Interesting term "high command". Does it mean, whatever it is, "high command" has higher command on the subject of governing, or does it mean it has higher command on the Government itself?

Does "high command" command the highest governing power of the nation - PM? If so, how correct is it for the Congress to still have such a committee of its party office bearers? Isnt this cheating, fraud?

And moreover, is it right for none other than the Prime Minister himself to quote the term "high command" implying that there is someone commanding him? But of course, he is a Strong PM. "So all ijj well. Everything else can Go to hell!?"

Vishal said...

I thought Ajit Pawar was nephew of Sharad Pawar! :)

About the 2G scam, is the loss really that of Rs 1,76,000 cr? I don't know how CAG came at that figure, but I have made some my own calculations.

8 2G licences were sold @ Rs 1615 cr each. That gives us Rs 1615 cr * 8 = Rs 12920 cr, this is what was actually received by the Government. Add to that a loss of Rs 1,76,000 cr, it gives us Rs 1,88,920 cr for 8 licences. That means Rs 23,615 cr for each licence.

Now, recently 3G spectrum had been sold (in 2010). No one took the Pan-India licence as in the above 2G cases but it was certain that all the spectrum available for sale was sold. 3 licenses in each circle can also be termed as 3 licenses total. 3G spectrum sales amounted to Rs 67,710 cr. That means each licence was sold for Rs 22,570 cr. (67710/3)

Why would a company pay a sum of Rs 23,615 cr for a 2G licence where there is all sorts of competition already in the market and pay only Rs 22,750 cr for 3G which is high-technology and not much competition?

Another way to look at it. Unitech bought licence for Rs 1615 cr, sold 67% stake to Telenor for Rs 11000 cr. So, it can be said that the value of licence according to Telenor was Rs 16,418 cr (11000/67*100). But did this sale only involved spectrum sale? What about other assets standing in the books of Unitech, now known as Uninor? Can't it be inclusive of Telecom equipments which may have cost higher than the licence?

So, here Mr CAG of India, I don't quite agree with you, knowing full well that you're mybaap of my own profession!

Ok, ofcourse there is some catch there, and I don't know what it is but am eager to find it out! Any place where a detailed CAG report can be found? Not just the estimate but how they reached to such an estimate!

Dirt Digger said...

The CM of Maharashtra is like a circus act. Lets see how the next guy can hang on.
Sad that Shiv Sena/BJP cant capitalize on such incompetence to provide a viable alternative.
Loved your note on PM not being part of the "high command" :)
Yup that's only for the maa-beta combination.

Dirt Digger said...

One more thing, in my state there was a saying that if you asked a state Congressman about the weather, he/she would respond that they needed to get the news from Delhi central command ;)
Guess the same applies to the Cabinet as well.

Sudhir said...

@Vishal - thanks for the questions :). It was 9 operators, and not 8. So we have 1615*9 = 14,535. Now, the loss from under-pricing of the spectrum is pegged at 1.40 lakh crore (one report says CAG put the loss anywhere between 90,000cr - 1,40,000 cr). By calculations, each operator would have paid ~ 11k -17k cr at that time, which does sound reasonable.

This link gives some details of the CAG report -

Also, an additional 36,000 crore loss was arrived at by CAG citing that the contract limit was extended for some operators (details though are awaited on this).

Also, some companies selling of stocks later at such a high price is not a mere coincidence me thinks. No company will shell out so much money to buy stocks and then again invest more in building infrastructre, if it was not sure about the value and profits at stake. Me thinks there is more to those prices than just infrastructure.

Hope this clarifies :)

@CodenameV - even I was totally surprised that the PM's comments were not even hyped up - after he so openly said them. Well, that's our media!

@DD - True - BJP-SS lost the elections. Cong-NCP didn't win them. That's how pathetic the oppn is.

Vishal said...

@ssudhirkumar thanks for replying :-) . I agree there is more to payment by Telenor than just infrastructure and as per the canary trip, actually, all the money paid was for spectrum only, i.e. So, ofcourse it is the earning capacity which matters the most and may be not the infrastructure.

And the site- canary trip is very informative. Thanks for suggesting :)

Btw, how did you know my twitter handle? I mean, my blogger id and twitter id r both different! Even the email ids in the 2 r different!

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