The draft report of the Public Accounts Committee (PAC) of Parliament is understood to have asked the UPA government to quantify the loss to the exchequer from the 2G scam and recover it from companies that benefited from this.
At the same time, it has rapped the Prime Minister's Office (PMO) and the Department of Telecom (DoT) for "misleading" the prime minister on 2G spectrum allocation.
The PAC has also recommended that the Telecom Regulatory Authority of India (Trai) should get more powers to handle spectrum allocation, licensing and pricing. At present, Trai's recommendations on these subjects can be rejected by the Department of Telecom (DoT). It has also warned against appointing retired DoT officials as Trai chiefs.
PAC's Congress and DMK members have rejected the 270-page report and called for the ouster of Chairman Murli Manohar Joshi. Speaking to reporters after the meeting, Congress members KS Rao, Saifuddin Soz and Naveen Jindal and DMK member T Siva attacked Joshi for "hurriedly" pushing the report for "political mileage".
The report, circulated among members today, would be placed for approval before the PAC on Thursday.
While the Comptroller and Auditor General has estimated the loss from the scam at Rs 1,76,000 crore, the figure based on Trai's formula is half of this. The Central Bureau of Investigation, probing the scam, has pegged the loss at Rs 30,984 crore.
The suggestion to recover the loss, if accepted, could mean a big hit for telecom companies such as Uninor, Loop, Videcon, Etislalat DB Realty and S Tel, among others.
The report, without directly criticising Prime Minister Manmohan Singh, says his desire to keep the PMO at an arm's length indirectly helped the telecom minister to go ahead and execute his "unfair, arbitrary and dubious designs".
Among other things, the report comes down heavily on P Chidambaram, the finance minister in 2008, for suggesting the matter (2G spectrum allocation) be treated as closed.
It observed that the finance minister, in his note, said the price of spectrum should be based on its scarcity value and efficiency of usage but made a "unique and condescending suggestion that the matter be treated as closed".
The draft report has pointed out that A Raja, the telecom minister in 2008, wrote to the prime minister on December 26, 2007, on the 2G issue.
"But the letter, along with the then External Affairs Minister Pranab Mukherjee's note on a suggested course of action, was submitted to the prime minister on January 7, 2008, after 12 days of the communication minister's letter. On January 11, 2008, the private secretary to the prime minister conveyed the desire of the prime minister to take into account the developments concerning the issue of licences", says the report.
The sequence of events shows some unfortunate omissions, it says.
While the licences were issued on January 10, 2008, the file, resubmitted to the prime minister on January 15, was received back by the private secretary to the prime minister with a note that the prime minister wants this to be informally shared with the department and does not want formal communication and wants PMO to be at an arm's length.
The report does not name any company or corporate executive but strongly criticises the bureaucrat-corporate-politician nexus.
It asks the government to take steps to break this and bring the guilty to justice. This is apart from action against companies that suppressed facts.
The PAC -- although it couldn't complete its hearings due to strong opposition from the members of both DMK and the Congress -- said the role of the secretary of the Department of Economic Affairs was deficient and wanting.
The report also said that "non-compliance and non-implementation of any decision of the Cabinet should invariably be put before the cabinet, failing which the Cabinet Secretariat should fix responsibilities".