Mr. Rebates

Tuesday, November 16, 2010

India Telecom Minister Resigns Amid Corruption Allegation

Corruption and India go hand in hand, while many countries are doing there best to reduce corruption at all levels, not so in India. Corruption and economic development go hand in hand, the less corruption a nation has the higher the quality of life for her citizens.
In this day and age of E-com good news as well as bad news travels fast, news such as thing doesn't bring confidence to investors in the Indian economy.

NEW DELHI -(Dow Jones)- Indian Communications and Information Technology Minister Andimuthu Raja resigned late Sunday, the third government official to resign amid corruption allegations in less than two weeks. 

Kapil Sibal, minister of human resource development, was named to take up his duties, the Indian government said late Monday. 

Raja has faced scrutiny by India's political opposition over allegations that he favored some telecommunications firms over others in their application for radio airwaves, or spectrum. Specifically, the opposition has accused Raja of allegedly allocating spectrum to nine telecommunications companies in an irregular manner and at discounted prices in 2008. The allegation is that these practices cost the country as much as $40 billion.
The office of India Prime Minister Manmohan Singh said Raja's resignation was accepted. 

Raja wasn't available to comment. Speaking to reporters in Delhi after submitting his resignation Sunday, Raja denied wrongdoing, adding he resigned "in order to avoid an embarrassing situation to the government and...Parliament." He added, "I'll prove that I did everything in accordance with the law."

Raja's resignation comes shortly after former Maharashtra Chief Minister Ashok Chavan and former Congress Parliamentary party Secretary Suresh Kalmadi stepped down over separate corruption allegations. Both have denied wrongdoing. 

This comes at a time when Parliament is struggling to focus on its legislative agenda. The opposition, led by the Bharatiya Janata Party, has brought parliamentary proceedings to a halt over the spectrum issue since Parliament's winter session started Nov. 9. Raja said he agreed to step down on the advice of M. Karunanidhi, leader of Raja's Dravida Munnettra Kazhagam party, a coalition partner of the ruling Congress party. 

One of the most serious accusations against Raja is that he allegedly retroactively changed the deadline for applying for spectrum to Sept. 25, 2007, from Oct. 1, 2007, in order to favor firms that applied earlier while leaving others out. 

Opposition party members also accuse Raja of massively undervaluing what is known as the 2G spectrum--frequencies used to transmit phone calls and text messages to mobile phones. They allege he sold each license for a fixed price of about $366 million, a small sum compared with one slot of nationwide bandwidth for third-generation, or 3G, services, that went for about 10 times that amount at a government auction this year. The 3G spectrum powers internet wireless signals on phones. 

Raja says his move to allocate spectrum to nine new industry players helped to drive down prices and sparked massive growth. India now has more than 670 million cellphone subscribers and continues to add new users.
The resignation has sparked investors' fears that some of what they see as much-needed regulations could once again be delayed with a new person taking charge. 

Among immediate issues pending are the Telecom Regulatory Authority of India's proposed moves on pricing. The regulator suggested that operators should be charged a one-time fee for exceeding a certain amount of bandwidth for their 2G services. It proposed that its fee should be linked to the value of 3G bandwidth. But analysts say such a move is unpopular with the country's telecom operators as the fee will likely add to their costs.

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