India's telecom minister resigned on Sunday, amid scrutiny over his role in an alleged spectrum allocation scam that could have cost the government $38 billion (€27.8 billion).
Minister A. Raja told reporters he had resigned on the advice of the prime minister Manmohan Singh and Tamil Nadu party leader M. Karunanidhi, following allegations he issued 2G licenses at well below market value in January 2008
Despite resigning, Raja remains confident inquiries into the process would clear his name.
In a statement mailed to local media, Karunanidhi said that while Raja had followed spectrum allocation procedures in place since 1999, some opposition party members were planning to “create a situation of bringing everything to a standstill” by disrupting parliament until Raja was ousted.
Investigations have allegedly uncovered documents suggesting that senior DoT officials collaborated with some private companies to ensure they received spectrum licenses.
The licenses had also been awarded on a first-come-first-serve basis, at prices set in 2001, and the process had been set up to limit the number of applicants despite regulator Trai recommending the spectrum be allocated though an open auction process.
The allegations are being investigated by government auditor CAG, and are the subject of a supreme court battle, due to start today.
CAG is said to have concluded that the decision not to pursue an open auction could have cost the government up to 1.72 trillion rupees (€27.8 billion). India's 3G auction this year raised nearly $15 billion.
Opposition parties - including the AIADMK party which had been leading calls for Raja's resignation - welcomed the move but said the probes need to continue, the Hindu said.