New Delhi: The comprehensive rejection of the implementation of its telecom policy by the Supreme Court has dealt yet another political blow to the Congress-led United Progressive Alliance (UPA) government. The setback, which has come just when the government was beginning to collect itself ahead of the February-March polls in Uttar Pradesh, considered as a mini-general election, is likely to spell another round of policy paralysis.

The court verdict ordering the cancellation of 122 cellphone licences granted since January 2008 is seen as fresh indictment of Prime Minister Manmohan Singh’s government, which has been struggling to fend off charges of corruption.

Brave face: Kapil Sibal. AP

The Bharatiya Janata Party (BJP) demanded the resignation of home minister P. Chidambaram, the then finance minister, for his alleged role in the irregular sale of spectrum, and also sought to target Singh by arguing that he “cannot escape” the political responsibility as the head of the government.

The government, however, put up a brave face. Welcoming the judgement, telecom minister Kapil Sibal blamed predecessor A. Raja, who has been in jail facing trial since last February, and the policy of “first-come, first-served” taken by the former BJP-led National Democratic Alliance (NDA) for what went wrong in the ministry.

“There is no indictment of the Prime Minister or the then finance minister (Chidambaram) in the Supreme Court’s judgement. If there is any indictment, it is the 2003 policy of the NDA government and we only followed it. The PM was no way responsible and the finance minister was anyway not responsible,” he told reporters at a hurriedly convened press conference shortly after the Supreme Court judgement.

Sibal, who had a brief meeting with Singh after the judgement was delivered, said the government will abide by the judgement that spectrum should be auctioned.

Sibal, who repeatedly maintained that Raja is found to have committed irregularities, pointed out that the former minister, belonging to the Congress’ key ally Dravida Munnetra Kazhagam (DMK), did not pay any heed to the advice given by the finance ministry or the Prime Minister’s Office. Sibal claimed the government did not get “time” to act in collective responsibility as the decision to grant licences was taken “overnight”. The DMK could not be immediately reached for a response.

However, Singh, in the past, had defended Raja, saying he had only followed the existing policies, while Sibal himself had termed “zero loss” refuting the Comptroller and Auditor General of India’s finding that the second-generation (2G) spectrum allocation irregularities had cost the exchequer Rs1.76 trillion.

Pratap Bhanu Mehta, president of Centre for Policy Research, a New Delhi-based think tank, said it was “unbelievable” that a matter of such magnitude had not come to the knowledge of the Union cabinet. “This kind of comprehensive rejection of the policy is unprecedented. It clearly shows that the government has not been able to defend its policy. It’s an indictment of the government... Government’s defence has collapsed. It’s clear that the policy was a collective decision... Government having no knowledge of the matter of such magnitude sounds unbelievable.” The Communist Party of India-Marxist (CPM), which supported the UPA during its term between 2004-08, also asked the PM to take a call on its fallout as the judgement has exposed the government’s claims. Demanding the resignation of Sibal for claiming that there was no loss to the public exchequer, senior CPM leader Nilotpal Basu said, “The Prime Minister, who is known as a paragon of virtue, will have to take a call on the fallout of the judgement, which has called the bluff on the government’s claims on the 2G scam.”

The BJP, which has been lagging behind in terms of campaigning in the politically crucial Uttar Pradesh, tried to shift the focus of state elections to the issue of corruption. “The UPA government, in the 2G spectrum allocation, has made India the capital of crony capitalism,” BJP leader Arun Jaitley, who addressed media in Lucknow said. Pointing out that the spectrum was a national property and it should have been sold at the market price, Jaitley said it was the “biggest single act of corruption” in the history of Independent India. He said the Congress’ right to challenge the system of ugahi raj (institutionalized extortion) of the ruling Bahujan Samaj Party and goonda raj of the Samajwadi Party in Uttar Pradesh, has taken a knock following the Supreme Court order.

However, voters in UP seem to be detached from the developments in New Delhi. Rajeev Singh, who runs a shop in Godowlia in Varanasi, said the common man was more worried about his own survival. “People are so involved in winning their own daily bread, where is the time to find out about these big things. Yes, I am aware of corruption involving thousands of crores. Everybody is corrupt, irrespective of whoever is in government.”

The government’s woes may aggravate if there is an adverse judgement from the lower court over the role of Chidambaram in the 2G scam. The fate of the home minister hangs in balance with the apex court leaving the decision on a probe against him for his role in the issue to the trial court. The trial court is to give its ruling on Saturday. A cabinet minister, who did not want to be identified admitted that any observation against the home minister’s role or the government’s “collective responsibility” would further deepened the crisis for the UPA government.

PTI and Mint’s Appu Esthose Suresh contributed to this report from Varanasi.

liz.m@livemint.com