India's telecoms minister resigns amid anticorruption drive

India’s telecommunications minister resigned Sunday over allegations of massive corruption. His was the latest in a recent string of graft-related resignations from India’s Congress-led government – and the clearest sign yet the government is attempting to clean up its tainted image ahead of important state elections.

Andimuthu Raja, who until Sunday presided over the world’s fastest-growing telecoms market, handed his resignation to Prime Minister Manmohan Singh a year after an investigation began into the sale of second generation airwave licenses to mobile phone operators. Those sales are reported to have deprived the Indian version of the IRS of up to $30 billion in revenue.

Political corruption has long been a major concern in India, but little has been done to address it until recently. Transparency International ranked India 84th out 180 countries in its Corruption Perceptions Index last year. In a 2008 study, the organization found that Indians living below the poverty line paid out $195 million annually in bribes to access basic services.

New push against corruption

Indeed, in a country in which politicians often elude justice, and about a quarter of Indian parliamentarians have faced criminal charges, Mr. Raja’s downfall is particularly significant because he is a member of the DMK party, which rules the southern state of Tamil Nadu and is a key ally in the Congress-led coalition. Because his departure could weaken the government’s majority, analysts say the government for the first time appears to be prioritizing its anticorruption drive.

Upcoming elections in states in the south are a factor in such a visible anticorruption campaign, say observers. The government is likely to have been emboldened to do this following last year's general elections, which gave the Congress party a bigger majority. Another factor is possibly the international embarrassment caused by allegations of corruption that marred the Commonwealth Games in October.

Speaking with university students Monday, Rahul Gandhi, scion of the Congress party, said the central government was taking decisive action over corruption. “There is need to be very strict on corruption and the government is in the process of taking some very strict action,” he said.

Since parliament opened last week, the opposition has repeatedly blocked proceedings, demanding the government act against corruption.

Fishy telecoms sales

In 2008, Raja’s ministry sold eight new telecom licenses to domestic players for a total of about $2 billion. Many of these firms, newcomers who had little experience in the sector, went on to sell large stakes in their new companies for hefty sums.

This year’s auction of 3G – or third generation – licenses heightened the pressure on Raja. Fetching nearly $15 billion, the sale highlighted the allegedly dirt cheap prices at which 2G licenses had been issued. India’s Central Bureau of Investigation, the country’s anticorruption watchdog, has been investigating the pricing of 2G airwaves since October 2009.

Analysts say they hope Raja’s departure will clear the way for the government to see through important legislative changes that have been held up by the scandals.

Series of resignations and arrests

Earlier this month, two senior Congress leaders quit their posts over corruption allegations. Suresh Kalmadi, who was head of the committee that organized October’s Commonwealth Games and also the parliamentary secretary of the Congress party, stepped down over claims he had siphoned off government money meant for the games. Ashok Chavan last week left his job as chief minister of the western state of Maharashtra over his alleged role in a housing scam in which apartments reserved for widows were sold instead to politicians and Army officers.

In April, Shashi Tharoor resigned as India's junior foreign minister after an especially damaging cricket team ownership scandal.

And Monday, India's top investigating agency arrested two 2010 Delhi Commonwealth Games officials for allegedly awarding contracts to companies at inflated prices – the first arrests since a high level investigation was launched last month into corruption charges surrounding the games.

“It is imperative that the Congress and the UPA are not made to feel as if they have achieved something merely by changing the faces at the helm,” stated an editorial in Tuesday's DNA daily newspaper.

“This is often a quick response to end public anger and then it’s back to business as usual. But the extent of money, greed, culpability, and arrogance involved in these three scams are so horrific and the network of people so widespread that three heads will hardly suffice."