The department of telecommunications (DoT) has hit back at the Director General of Audit (posts and telecommunications) on the issuance of new licences and 2G spectrum allocation, saying the Comptroller and Auditor General of India (CAG) has no powers to challenge policy decisions taken by the government.

DGA, which is part of CAG, had said DoT had granted new unified access service licenses (UASL) to certain companies without proper verification of their eligibility and other credentials. It sought clarifications from the telecom ministry on this issue, which allegedly cost the exchequer Rs 26,000 crore.

The ministry of law and justice has opined that CAG has no duty or power to challenge policy decisions taken by the government, DoT Secretary R Chandrashekhar said in a letter to the DGA.

After giving its reply, DoT had sought the law ministrys views on whether in terms of the powers and duties of the CAG contemplated under Article 149 of the Constitution, the proceedings initiated since November 2009 by the DG Audit (P&T), challenging several policy decisions taken by the government are legally in order, their letter added.

The department maintains that all new licenses were issued under the policy decisions taken by the government in November 2003 and subsequent detailed guidelines issued in December 2005. DoT had issued eight new 2G licenses in 2008 to companies including Uninor, Sistema Shyam, Etisalat DB, Stel and Loop Mobile.

Communications and IT minister A Raja has been facing the charge of distributing new licences at 2001 prices of Rs 1,651 crore for pan-India operations, bundled with start-up spectrum of 4.4 MHz.