India Ex-Telecom Minister's Arrest May Fail to End Impasse Before Budget

The arrest of Indian Prime Minister Manmohan Singh’s former telecommunications minister in a $31- billion phone-license probe may fail to end a political gridlock as the government prepares its budget, analysts said.

The Central Bureau of Investigation yesterday arrested Andimuthu Raja, his personal secretary and the former top bureaucrat in the ministry after India’s chief auditor said in November second-generation airwaves were sold for an “unbelievably low” $2.7 billion when they may have been worth at least 10 times more. The CBI apprehended the three men for favoring certain companies and violating guidelines, it said in a statement yesterday.

The opposition, led by the Bharatiya Janata Party has stalled parliament calling for a joint probe into the auction, which Singh has refused. The stalemate disrupted the entire session that ended in December, making it the least productive in at least 25 years. The houses are scheduled to meet from Feb. 21 to pass the government’s budget.

Raja’s arrest strengthens the opposition’s case, said N. Bhaskara Rao, chairman of the Centre for Media Studies in New Delhi. “They will stick to their demand for a joint parliamentary committee probe,” he said. The arrests “bring out the gravity of the situation with regard to corruption in the country and the need for urgent action to check that.”

Raja’s Resignation

Raja resigned from Singh’s cabinet on Nov. 14, two days before the Comptroller & Auditor General of India unveiled its report on the 2008 sale of airwaves. Telenor ASA and Emirates Telecommunications Corp. were among operators that purchased stakes in Indian companies the auditor said weren’t qualified for the licenses.

The Bharatiya Janata Party said Raja’s arrest is “belated” and has strengthened the demand for a cross-party probe into the spectrum allocation irregularities.

“I wish the prime minister had acted three years ago so that this huge loss to the public exchequer had not taken place,” BJP leader Arun Jaitley said in New Delhi yesterday.

The ruling Congress Party said the development will not affect Singh’s credibility.

“Those who doubted the sincerity and commitment to take action as per law should be silenced,” said party spokesman Abhishek Singhvi.

Raja has denied wrongdoing. His lawyer T.R. Andhyarujina declined to comment when reached on his mobile phone yesterday. Raja is a member of the Dravida Munnetra Kazhagam party, a key member of Singh’s ruling coalition.

‘Transparency in Policy’

“What happens to Raja is important for the future of how policy gets made and the transparency with which these decisions are taken,” said Kunal Bajaj, head of telecommunications consultant Analysys Mason India Pvt.

Raja was questioned by the CBI in December and January. Investigators said on Dec. 8 that they had found “incriminating” documents at his residences.

Singh told his party workers on Dec. 20 that he would punish anyone found guilty of corruption.

In November, federal agents arrested eight executives at the nation’s biggest life insurer, a brokerage and three state- run banks in a housing-loan probe and detained organizers of the Commonwealth Games for misuse of public funds. Last month, the government fired Suresh Kalmadi as the chairman of the games’ Organizing Committee.