History Matters | February 2012: Public Faithlessness in the UPA Regime

For a majority of Indians including those who understood law, 2G an open-and-shut case of corruption.

On 2 February 2012, Justice AK Ganguly and Justice GS Singhvi of the Supreme Court of India delivered a thunderbolt that not only caused ripples across Corporate India but also shook the very foundations of the United Progressive Alliance (UPA) regime.

(Photo: Namita Chauhan/ The Quint)

(This is part one of a four-part 'February' series that revisits significant historical events and policies, and how the lessons learned from them continue to be of relevance in present-day politics and society.)

On 2 February 2012, Justice AK Ganguly and Justice GS Singhvi of the Supreme Court of India delivered a thunderbolt that not only caused ripples across Corporate India but also shook the very foundations of the United Progressive Alliance (UPA) regime.

In a landmark judgment, the judges cancelled all the 123 2G telecom licenses that had been granted to assorted leading lights of India Inc in 2008 in what became notorious as the biggest scam to hit post-independence India.

The verdict stated that the licenses were issued in a "totally arbitrary and unconstitutional” manner. While the Who's who of the UPA and India Inc were in the crosshairs, the two big fishes were DMK leaders A Raja and Kanimozhi, the daughter of DMK chieftain M Karunanidhi.

A Raja was the Telecom Minister when these 123 licenses were issued. Both he and Kanimozhi were arrested by the Central Bureau of Investigation (CBI).

How the 2G Scam Mired the UPA in Corruption Controversy

This scandal provided even more ammunition to the "India Against Corruption" movement launched by the "Gandhian Anti-corruption crusader cum activist” Anna Hazare.

The Manmohan Singh government was like a deer caught in front of a speeding car with blazing headlights. For all practical purposes, it became a lame-duck government as ordinary Indians started believing any and every allegation of corruption against the leaders and family members of the UPA, no matter how wild they sounded or if they were backed by at least some credible evidence.

There are many lessons for contemporary India from this saga:

1. The first is that corruption is inevitable when and where politicians have discretionary powers.

2. While it is easy to arrest and even indict them, it is still incredibly difficult for the judicial system of India to convict the accused.

3. Corruption allegations find resonance with voters only if and when they "perceive” them to be credible and a leader to be corruptible.

So, what happened back then?

The Mobile Phone Boom and Spectrum Allocation in India

To recap history quickly, mobile phone services in India never really took off after they were launched in 1995 because usage costs were outrageously high. That was because companies that had won bids to operate the services had committed massive sums as annual license fees to the Telecom Ministry.

During the Atal Bihari Vajpayee regime in 1999 and 2000, the rules were changed and companies were then required to share a portion of their revenue instead of paying a license fee. That triggered the telecom revolution as usage costs kept falling, making mobile phones affordable for middle-class Indians.

By early 2006, the number of mobile phone subscribers in India crossed 100 million. It became clear that more spectrum needed to be allotted to old and new telecom players to service this booming demand.

Ideally, the government should have followed a transparent process of auction. Inexplicably, Telecom Minister A Raja decided that he and his bureaucrats would allocate spectrum and issue licenses by using their discretion in a first come first served policy.

This decision was taken despite strong objections from other stakeholders in the government including the office of Prime Minister Dr Manmohan Singh. The scandal became public when the infamous Radia tapes were leaked in 2010 where gory details of telecom licenses in exchange for cash and more were revealed.

A Raja was arrested by the CBI in 2011 and 14 people, including Kanimozhi were chargesheeted as accused. The logic appeared impeccable and the corruption charges seemed more than credible. For instance, the 123 2G licenses dispensed "like candy” by Raja fetched a fee of Rs 9,000 crore. Around the same time, a much smaller auction of 3G spectrum fetched a fee of Rs 69,000 crores.

A Case of Inefficient Justice System

For a majority of Indians including those with an understanding of the law, this appeared to be an open-and-shut case of corruption.

There was actual evidence of hundreds of crores being "lent” or given by license winners to entities controlled by the DMK, A Raja, and Kanimozhi. But this is where the second lesson of Contemporary India comes in: how difficult it still is to convict powerful people in India who face serious criminal charges.

In December 2017, the special CBI judge hearing the case OP Saini shocked the entire country by acquitting all the 14 accused in the case. His contention was that even as he spent weeks and months writing in his courtroom, "not a shred of evidence” was provided by the prosecution to prove their case.

The CBI did file an appeal in the Delhi Court. But for about five years, there was barely any progress in the hearing of the appeal.

This was considered by many to be yet another example of the abysmal failure of the justice system where cases drag on for so long that they lose meaning. Perhaps prompted by the clamour, the Delhi High Court is now hearing the appeal on a priority basis.

People familiar with the labyrinthine and mysterious process of court hearings in India are of the opinion that a verdict on the CBI appeal could come in 2024.

'Zero Loss Theory’ and a Sustained Public Anger Against the Congress

The third lesson is about public perception.

The then CAG Vinod Rai submitted a report in which it was claimed that the government of India suffered a "notional” loss of Rs 1.76 lakh crores in the 2G spectrum allocation scam. Note that the CAG never said if the loss was real or actual. But the public anger against the UPA regime was so high that many Indians believed UPA leaders and their cronies had actually robbed India of Rs 1.76 lakh crores.

A senior minister then in the Congress kept appearing on media to claim there was actually zero loss of money. He had some seemingly convincing arguments. But he was mocked and ridiculed for his "Zero Loss Theory” which became the subject of numerous memes.

Congress leaders have consistently targeted Vinod Rai as a BJP mole who was determined to sabotage the UPA regime.

When A Raja and others were acquitted in 2017, they claimed they were right all along. But then, public perception is still strong that there was corruption.

Contrast that with the run-up to the 2019 Lok Sabha elections. Rahul Gandhi spearheaded a strident campaign accusing Narendra Modi of large-scale corruption in the Rafael deal. A large number of "independent” media platforms backed him. The matter went to the Supreme Court. What about the public? Hardly anyone beyond the circle of people who detest Modi believed the charges.

Similarly, Rahul Gandhi has been targeting Modi for years by accusing him of selling of India’s infrastructure and natural resources to Industrialist Gautam Adani. How many Indians believe him?

The Issues of 2013 Resonate in 2024

The other thing with perception is how they are interlinked and have a multiplier effect on voter behaviour.

Since opinion polls became common in India, inflation and unemployment have consistently topped the charts as two issues that worry and disturb voters the most. The run-up to the 2024 Lok Sabha elections is no different.

Various CVoter surveys over the last few years have revealed that retail inflation is really hurting Indians, particularly lower middle-class people who make up a significant chunk of voters.

In a recent survey, more than 6 out of 10 respondents say that inflation has made it "very difficult” for them to manage family budgets. Yet, the current regime remains in poll position for 2024.

There is a reason.

In 2013, along with inflation, corruption was the top issue that worried voters. This time, it is not even in the top 10 issues, no matter how many crony capitalism charges Rahul Gandhi makes.

Plus, dissatisfaction with rising prices combined with anger at “perceived” corruption triggered a multiplier effect that led to massive anti-incumbency.

(Yashwant Deshmukh & Sutanu Guru work with the CVoter Foundation. This is an opinion piece and the views expressed are the authors' own. The Quint neither endorses nor is responsible for them.)