It was explained to the President that in telecom, the decision that the government has taken is in pursuance of a policy which was not placed in the Parliament, though till now there is a policy which is deemed to have been adopted by the Parliament in 1994. The switch over to a revenue sharing arrangement will only benefit the cellular operators of the Metro cities, which include companies, which are just front for foreign multinationals. And, these companies have paid only Rs. 3.5 crores in the last three years. This year alone, they were to pay Rs. 6,023 per subscriber to the government. With 5 lakh cellular subscribers in the four Metro cities, this would amount to Rs. 300 crores. This is give away for this year alone. If we take into account that their licence was to terminate after ten years, the amount would run into thousands of crores. And, above that the new decision has extended the period of licence to 20 years. This is the rehabilitation package to foreign telecom companies at the cost of the national exchequer. The new policy, of course, cannot stop the termination of the licences of companies operating in circles, as they quoted high licence fees and are not in a position to pay the interim amount, which is very high. These licences will be taken over subsequently by cash rich Metro companies. The leaders explained to the President that there was a major scam involved in this decision and calls for immediate stoppage and a thorough enquiry. The President has promised to take up the issues with the government.

It was pointed out that the decision of disinvestment was most unfortunate because they involve companies, which include Navaratnas and most efficient performers in the national economy. To go ahead with the programme without any discussion in the Parliament will be a grave injustice to the democratic system in the country.

The leaders who met the President are: E. Balanandan, MP, Nilotpal Basu, MP (both CPI(M), J. Chittaranjan, MP, D. Raja (both CPI), Debbrata Biswas, MP (Forward Bloc), and Srikant Jena (JD). Apart from these, the RJD also was very much part of this initiative. The memorandum presented to the President is being annexed.  

Hon’ble Rashtrapati Ji,

We would like to draw your attention to certain decisions taken by the Council of Ministers on 6^th July, 1999.

These decisions pertain to the switch over all telecom operators to the revenue sharing regime in both the basic and cellular telecom service sectors. The decision will not only allow new players to operate on a revenue sharing basis; but it will also allow old licensees under license fee regime to switch over the new arrangement. Apart from the fact that the old licensees most of whom have failed even to begin the services in the basic services sector are being bailed out by waiver of the license fee for which they had entered into a commercial contract. This will lead to a loss of revenue to the public exchequer to the tune of Rs. Four thousand crores. What is all the more disturbing is this arrangement is being worked out even before the TRAI has decided on the actual proportion of sharing of revenues. Further, the duration of the license period of the cellular operators has been extended to 20 years. And most importantly, these steps are in pursuance of the National Telecom Policy 1999, which had not even been placed on the floor of the Parliament. This step encroaches on the right of the parliament particularly because the National Telecom Policy 1994 was placed in both houses of the parliament on May 13, 1994 and after the lapse of 30 days and in the absence of any amendment or disapproval was deemed to have been adopted by both the houses. The pursuance of the new policy by council of ministers who do not enjoy the majority in the Lok Sabha and at a time when the House stands dissolved is a grave impropriety. There has been already a widespread criticism against this move of the government.

The other decision pertains to the government’s intention to raise Rs.10,000 crores through disinvestment of IOC, VSNL, Hindustan Zinc Limited, Hindustan Latex, Madras Fertilizers and the privatisation of ITDC where the government’s stakes would be brought down to 26%

We feel that the present government at the present point of time does not have the competence to take all these steps. These moves do not have any precedent and constitute grave impropriety in terms of constitutional practices and conventions.

Therefore, we implead with you to ensure that these decisions are kept in abeyance until a new government comes into place after the ensuing Lok Sabha elections.

With our deepest regards,

Yours sincerely,