Scam claim leaves black mark on Mr Clean's image

Parliament has been adjourned repeatedly for the past three weeks by an irate Opposition over a corruption scandal which has cast aspersions on Prime Minister Manmohan Singh's "Mr Clean" image in a blatantly dishonest establishment.

The 78-year-old former Oxbridge economist, revered by Western leaders for his erudition and probity, has denied accusations of "inaction" in the questionable 2008 auctioning of telecommunication licences by one of his Government's senior ministers for a fraction of their value.

The ignominy over the US$39 billion ($51 billion) corruption outrage - about the equivalent of India's annual defence budget - has not only strained governmental ties with a crucial coalition ally but has damaged Singh's reputation for the first time.

The loss of face for Singh occurred after the Supreme Court, for the first time in independent Indian history, asked the Prime Minister to file a reply explaining his "alleged inaction and silence for 16 months" on a petition filed by an Opposition politician on the questionable auctioning of second-generation (2G) spectrum licences for mobile phones.

Government corruption watchdog Controller and Auditor General (CAG) had declared in its report that the 2G licences were sold at discounted rates to select firms in an "arbitrary, unfair and inequitable manner".

Though CAG estimated that the loss to the Government could reach US$39 billion, it declared this figure to be speculative as it was based on the exponential growth of the country's telecom sector.

India is the world's fastest-growing market for mobile phones and related services, adding more than 14 million subscribers each year.

The furious row over what has come to be known as the "2G scam" forced Telecommunication Minister Andimuthu Raja to resign last weekend amid calls by the Opposition for his arrest.

The CAG revealed that Raja's ministry had flagrantly flouted rules and allegedly ignored Singh's cautionary advice while handing out 122 licences to operators, some of which did not even qualify to bid for the contracts.

A defiant Raja denies any wrongdoing. But Rekha Gupta, deputy CAG, declared that 85 of the 122 licences were issued to ineligible companies with little or no experience in telecommunications.

According to the CAG, the chaotic and seemingly arbitrary manner in which the telecom licences were auctioned raised concerns over conducting business in India.

Corruption has long been a serious handicap in India - it was ranked 87th out of 178 countries in a report this year by Transparency International, the global anti-corruption monitoring group. Rival China was ranked 78th.

Documents filed in the Supreme Court defended Singh and claimed he had followed procedures with regard to 2G licence issue.

As a follow up, a legal government representative appeared on Singh's behalf in the Supreme Court last week to clarify how the Prime Minister handled the sensitive telecom issue, into which the Opposition is demanding a joint parliamentary probe.

Singh's Government has refused this request, claiming that there was no need for one as a separate investigation is under way.

At the weekend, Singh declared that if any "wrong thing" had been done by anybody he or she would be "brought to book".

But analysts, MPs and a large section of Indians polled by TV news channels do not believe Singh. They are convinced that, like innumerable other corruption scandals involving politicians and civil servants, this too will fade with nobody held accountable.

Despite the log-jam in Parliament, Singh's coalition Government is not at risk of collapsing. But Congress Party insiders concede that the scandal has weakened the Government's ability to move on key economic reforms.

Senior ruling party MPs said privately that it had also severely damaged the Government's "feeble credibility", hammered by other corruption scandals swirling around last month's Commonwealth Games and a building scam in Mumbai involving senior Congress politicians, civil servants and even military chiefs.