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Journalism of Courage
New Delhi, Aug 3: While the Delhi High Court has not put any stay order on the controversial telecom bailout package, the entire scheme has nearly come unstuck with the court suggesting that it be reviewed by Parliament once a new government comes in.
The court has suggested that the private telecom operators give an undertaking that the entire package will be put to the new parliament, and if this is voted down by it, the operators will agree to go back to the earlier license arrangement. Operators have been asked to revert to the court on August 10. The division bench comprising Chief Justice S.N. Variava and Justice S.K. Mahajan will give its final ruling based on what the operators agree to.
If the operators give such an undertaking it is possible, government officials are arguing, that the court will allow the new package to continue, and the operators would then be allowed to operate under the new and more lenient licensing arrangement. If the operators agree, and the court allows the package to go through, it will then be seen as a partial vindication of the government8217;s stance 8212; it will also allow the government to tide over the allegations of financial impropriety in the package.
As was expected following the first day8217;s hearing on the public interest litigation filed by the Delhi Science Forum to challenge the bailout package, the government had a hard day defending its new policy today as well. Chief Justice Variava repeatedly questioned the urgency in going ahead with the telecom package8217; when elections were around the corner. Matter after matter taken up by the Court have been held up as the answer from the government has been that these could not be taken up owing to the Election Commission8217;s code of conduct, why then such a large policy issue cannot wait for two months till a new government is in place,8217; Justice Variava observed.
Arguing her case for the Delhi Science Forum, Indira Jaisingh had several digs at the government as well. With the government arguing that time was of the essence 8212; it submitted a note sent by ICICI chief K.V. Kamath to the PMO on August 2 on the urgent need for the new package 8212; Jaisingh said a service which was unknown to India till 1995 has become more vital than providing drinking water8217;.
Jaisingh said that contrary to the government claims of Rs 10,000 crore of financial institutions being stuck in the sector, ICICI had put in only Rs 986 crore, IFCI another Rs 300 crore and IDBI Rs 1,200 crore. Indian equity and FII holding, she argues was only 41.6 per cent while overseas financing accounts for 58.4 per cent. 8220;Who are they bailing out?8221; she then questioned. Interestingly, Kamath8217;s note also says the exposure of Indian banks and financial institutions by way of loans and guarantees could not be more than Rs 3,700 crore.
The government however, stoutly defended the NTP saying without this there would have been a disruption in this vital segment of communication services 8212; Kamath8217;s note says that a total of 1 million subscribers will be hit if nothing is done to make private telecom services viable. Attorney General Soli Sorabjee brought to the notice of the court several letters written by the Telecom Regulatory Authority of India and several members of Parliament about the need to 8220;urgently8221; resolve the problems of the telecom sector.
Sorabjee said any termination of the licence would have had an immediate dampening effect on foreign and domestic banks and financial institutions and could well result in lack of confidence of investors in the Indian telecom sector.
The AG further argued that government took this decision in public interest as 8220;strict enforcement of licence conditions would in many cases lead to serious financial losses and bankruptcy, of several companies leading to disruption of this vital segment of the communication services.8221;
