New Delhi: The Central Bureau of Investigation (CBI) arrested former telecom minister A. Raja for his alleged involvement in the so-called 2G scam, but the move is unlikely to win the beleaguered United Progressive Alliance (UPA) government a respite from the attacks it has been facing from the opposition.

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Indeed, with his arrest now signalling his possible complicity and probable guilt in the award of licences to telecom companies on favourable terms in 2008, analysts and members of the opposition parties are beginning to ask the obvious question: why did the government, and Prime Minister Manmohan Singh do nothing for two years?

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“I only wish that the Prime Minister instead of living in denial had acted three years ago so this huge, monumental loss to the public exchequer had not taken place," said Arun Jaitley, leader of the opposition in the Rajya Sabha.

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Raja resigned only in November after the Comptroller and Auditor General of India, the government’s auditor, presented to Parliament a report that said the 2G scam and other policy snafus in telecom could have cost the exchequer up to Rs1.76 trillion in notional losses.

Raja’s arrest comes a few days after Congress president Sonia Gandhi met Dravida Munnetra Kazhagam (DMK) chief M. Karunanidhi (Raja is from the DMK).

A DMK leader, speaking on condition of anonymity, said that the two parties had already discussed the arrest. The Congress and the DMK are expected to contest the coming polls in Tamil Nadu together. Analysts expect inflation, which the UPA has been unable to contain, and corruption to be key issues during Tamil Nadu assembly elections and coming elections in three other states—West Bengal, Kerala and Assam.

Facing the heat: A file photo of former telecom minister A. Raja, who was arrested by CBI in New Delhi.

A riveting sidelight to the controversy emerged when two magazines carried tran scripts, or recordings, of conver sations between lobbyist for the Tata group and Reliance Industries LtdNiira Radia with other lobbyists, journalists, bureaucrats and politicians; some of the recordings underlined a campaign in 2009 by the DMK to ensure that Raja kept the telecom portfolio. The UPA returned to power in the 2009 elections and there was a widespread feeling, and many news reports that Prime Minister Singh was keen to distance himself and his government from the 2G controversy by not retaining Raja as telecom minister. Like Raja himself, Radia too has been interrogated by investigative agencies over her role in the allocation of licences.

Apart from Raja, CBI also arrested his two key lieutenants, former telecom secretary Siddartha Behura, who has since retired, and Raja’s personal secretary R.K. Chandolia, according to senior CBI official Anurag, who uses only one name.

The arrest itself is unlikely to have an impact on the fortunes of the companies involved— Unitech Wireless Ltd (Uninor), Etisalat DB Teleservices Pvt. Ltd (Swan), STel Ltd, Videocon Mobile Services Pvt. Ltd (Datacom) and Loop Telecom Pvt. Ltd. The case being heard in the Supreme Court will decide their future.

Analysts are also unclear on what the arrest means for the DMK itself and its relationship with the Congress. Raja is close to Kanimozhi, Karunanidhi’s daughter, but her two half- brothers, M.K. Stalin and M.K. Alagiri, are indifferent to his fate. Through its history, the DMK has been troubled by family disagreements, said G. Palanidurai, a political analyst based in Chennai. Inflation, more than corruption, would play an important role in the coming elections, he added. “Corruption has been there in Tamil Nadu politics and people are used to it," he said.

The arrest of Raja is consistent with the UPA’s approach of battling its image as a corrupt regime by taking action against the offenders, said Balveer Arora, former head of the political science department at Jawaharlal Nehru University. “Since it is in consistency with the sacking of other leaders who had been charged of corruption, the party can say that it is determined to take on the corruption," he added.

That, though, hasn’t appeased the opposition Bharatiya Janata Party, which has taken on the government over corruption in the organization of the Commonwealth Games in Delhi, the allotment of flats meant for war widows to politicians, army men and bureaucrats in Mumbai, and the appointment of a central vigilance commissioner who is himself being prosecuted in a corruption case.

The Congress put up a brave face after the arrest. “Nobody will accept that the credibility of the Prime Minster or the government has been affected. That’s absolutely wrong... The integrity of the government is enhanced by allowing law to take its own course independently and objectively," said its spokesman Abhishek Singhvi.

According to senior CBI officials, Raja, Behura and Chandolia were arrested under the non-bailable charges of Prevention of Corruption Act and criminal conspiracy.

“They were arrested after we gathered enough evidence to prosecute them," a senior investigating officer said on condition of anonymity. “Raja and others will be produced before a special CBI court tomorrow (Thursday) and we will seek their police custody. However, it is likely that Raja may seek leniency on health grounds."

Raja, who has been raided and questioned four times, had undergone surgery in a Chennai hospital in December last year.

“Their custody will be required for further investigations in the case and to verify certain aspects," the official said.

The CBI officers said Raja could face more hurdles in getting bail as the agency will complete its probe by 31 March and file a chargesheet at the same time. An investigating agency has to file a chargesheet within 60 days, failing which the accused can seek bail. But once the chargesheet is filed in the court, bail becomes difficult to get.

CBI has to file a status report by 10 February and submit a final investigation report by 31 March to the Supreme Court.

Another CBI official said more arrests in the case are likely. On Tuesday, CBI questioned Raja’s brother and last week it twice questioned corporate lobbyist Radia. However, no case has been made out against Radia, who was raided by the agency earlier.

The agency registered a case in October 2008 under charges of Prevention of Corruption Act and criminal conspiracy against department of telecommunications officials, private companies and individuals. Since Raja was then a cabinet minister, he was not listed as an accused.

“During our preliminary investigations, we found evidence against him, following which a probe was initiated to know about the amount of money made by Raja," the official said.

Nikhil Kanekal, Shauvik Ghosh and Sahil Makkar, and PTI contributed to this story.