India Says Telecom Loss Estimate “Utterly Erroneous”

India’s telecommunications minister said the exchequer suffered a loss of about 170 billion rupees ($3.7 billion) from the sale of second-generation airwaves, almost one-tenth of what the nation’s top auditor estimated.

The Comptroller and Auditor General of India’s estimate of $31 billion loss from the sale of airwaves in 2008 is “utterly erroneous,” Communications and Information Technology Minister Kapil Sibal said in New Delhi today. The auditor’s methodology to calculate the loss has “no basis whatsoever,” he said.

The scandal related to the sale of 2G licenses has led to a corruption probe, the resignation of Sibal’s predecessor and stalled parliamentary proceedings. The auditor said in its November report that the government lost potential revenue after the airwaves were sold below market rates.

The Indian government collected 123.9 billion rupees from the sale of the wireless spectrum to companies, while they were worth as much as 1.5 trillion rupees, the auditor said. The Comptroller’s calculation was based on the price of third- generation spectrum auctioned in May.

Sibal took over the telecom ministry after Andimuthu Raja resigned on Nov. 14, two days before the auditor’s report was submitted to Parliament. Raja has denied any wrongdoing.

To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net. Santosh Kumar in New Delhi at sthakur10@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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