The Telegraph
Monday , April 21 , 2014
CIMA Gallary


It would be going too far to say that the verdict of the Supreme Court in the appeal of private telecommunications operators against an order issued by the Delhi High Court authorizing the comptroller and auditor general of India to audit their accounts broke new ground; it may be more accurate to say that it broke old ground. For there was an era in this country when the government considered itself only next to god, and chose to interfere in the minutest business decisions for the good of the society. If a manufacturer wanted to produce a different version of Handy Cap, he had to go to Delhi, queue outside a ministry shop, find the right agent to carry a bribe, and get a licence. The result was that manufacturers spent too much time chasing agents and too little manufacturing, and this country lost in the growth race to China. Some manufacturers got quite cosy with their controllers, and together, conspired to keep new competitors out. Industry became a coterie of manipulators, and India became the laughing stock of nations.

Just a quarter of a century ago, the whole of India had less than four million telephones; it took people years of chasing and bribery to get a phone. When the government finally licensed private operators in the early 1990s, the department of telecommunications bankrupted them with impossibly high interconnection charges. It took a Pramod Mahajan to break the departmentís stranglehold and give private operators a fighting chance. He made a lot of money; although ultimately his brother killed him. The story of telecommunications liberalization is a colourful one; some people have collected handsome royalties by writing books about it.

But recently, the telecommunications story has become monotonous and boring. The time was ripe for it to be livened up. And since the government would not think of bringing back departmental monopoly, the court had to step in. It has given a verdict that is eminently reasonable as far as it goes. The government takes away a certain share of the revenue of telecommunications operators. It has suspicions that they may take it for a ride; so it wants the comptroller and auditor general to audit their accounts. One might say, what is an audit more or less? Why should the operators object? But anyone who has run a business knows what a pain an audit can be: statutory auditors descend on an office, occupy the best chairs, and call for any records they like for days and days. The point is, they are doing that to the telecommunications operators even now, for the government makes all companies get their accounts audited. So the operators ask, why another audit? Why not accept the results of an audit by a statutory auditor, selected from auditors governed by the governmentís own statute? The verdict does not quite answer that question.