India's Minister for Communications and IT, A. Raja, has resigned amid allegations that he sold 2G licenses at rock bottom prices to some operators in 2008.
The opposition in India has been asking for Raja's resignation for a number of months, but matters came to a head after a report by the Comptroller and Auditor General of India (CAG) was leaked to the local media.
The report alleged that the minister may have caused large losses to the country's exchequer by allotting licenses bundled with spectrum at low prices to nine operators, according to the media reports.
Raja, who belongs to the DMK (Dravida Munnetra Kazhagam) party, a coalition partner in the federal government, resigned late Sunday. He told reporters that he had not broken any laws, and would prove it. He had resigned to avoid embarrassment to the federal government, he said.
India's Central Bureau of Investigation (CBI) said last year that it has registered cases against some officials of the country's Department of Telecommunications (DOT), private sector companies and some individuals, in connection with alleged irregularities related to the award of telecommunications licenses by the DOT.
The CBI did not name the individuals or companies that have been charged under the country's Prevention of Corruption Act.
The DOT decided that licenses would be allotted on a "first-come-first-serve" basis at low prices that were current way back in 2001, against the advice of the local telecom regulator, Telecom Regulatory Authority of India (TRAI), CBI said.
The DOT's decision to put a cap on the number of licensees per service area, and a decision to stop accepting new applications even before the last date fixed has also come in for criticism.
The CBI said that by putting a cap on the number of licenses, there had been a criminal conspiracy between certain officials of the DOT and some private companies and individuals to award licenses to select companies.
The CBI was criticized severely by India's Supreme Court last month for the delay in completing the investigations.
A number of the licensees said to have benefited from the allegedly irregular allotment of licenses and spectrum later went on to sell stakes in their services companies to foreign investors like Telenor, at prices far higher than the amount paid by the licensees for the spectrum, according to India's opposition parties.
In the case of 3G licenses, the government auctioned the licenses and spectrum. Tata Teleservices has already started rolling out services, with Bharti Airtel, India's largest mobile services provider, expected to start rolling out before the end of the year.