Telcos scandal – Where is the money now?

CAG audit has revealed that 6 Telcos in India under-invoiced their revenues...
CAG audit has revealed that 6 Telcos in India under-invoiced their revenues...

Six Telcos in the dock for ₹30,000 crores ($4.5 billion) fines

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]he Daily Pioneer has made it a habit to be the first to report on scams in the recent weeks and months. Today’s edition claims that 6 Telcos hushed up ₹45,000 crores ($6.7 billion) by under-invoicing of revenue. This translates to a loss of ₹12,000 crores ($1.78 billion) for the exchequer in taxes and this does not include any penalties.

Under the direction of the Supreme Court and the Delhi High Court, the office of the Comptroller and Auditor-General (CAG) audited the revenue and expenditure receipts of Airtel, Vodafone, Reliance Communications, Idea, Tata and Aircel. Some of these companies maintained two sets of books, one that had the actual revenue and another that showed a smaller amount for the purposes of reporting to the Government. Thanks to whistle-blowers, the CAG has been able to identify the real revenues collected by these six companies.

According to the auditors, each of the six firms under-invoiced the revenue between ₹6,000 crores ($892 million) and ₹18,000 crores ($2.7 billion). That is almost close to $15 billion!

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]S[/dropcap]o what happened to the money that was held back from being reported to the Government? Since all the money is collected in India, most likely it took the Hawala route to go into Dubai, then get converted as a Participatory Note and find its way back into India via a (you guessed it!) Mauritius/ Singapore company.

It would be interesting to know if each dealer was asked to keep two sets of books or was the cooking done in the offices of the six companies. Thanks to the stifling Socialist regimes that ran the country up until P V Narasimha Rao came along, the concept of keeping two books has become endemic.

But there is a silver lining to all this. Our suggestion to you, the consumer is to try and avoid handling cash. Use either your Credit Card (or NetBanking) to pay all the bills. This will establish a clear trail of cash and is harder to hide. This menace has to stop.


Note:
1. The conversion rate used in this article is 1 USD = 67.23 Rupees.

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