CHENNAI, India — India may well be a case of two vastly different stories. One is a grand tale of its phenomenal success, while the other shocks and scandalizes you.

India is the second-fastest growing nation in the world, and hopes to reach a growth rate of 10 per cent by the end of 2011. Contributing to this have been the country's agriculture revolution, impressive industrialization, expanding and prospering middle class and impressive literary rates in some States.

A far more significant factor has been India's democracy and its largely independent judiciary and media. One Western banker has been quoted as having said that "China has progressed so fast because it had no law, but now India will be the fastest because it has law."

The moot point now is, will the Indian tortoise saunter ahead of the Chinese hare? This is a bright possibility, but weighing down the bulky tortoise is a wave of corruption and disgrace that has been hitting the country hard in recent months.

A $39 billion scandal in India's mobile telephone industry has shamed the nation and sullied the image of Prime Minister Manmohan Singh, all along considered clean and incorruptible.

The man at the center of this outrage is Andimuthu Raja, the federal telecommunications minister, who was finally asked to resign earlier this month.

The sordid episode involves the sale of scarce electromagnetic spectrum by the Telecommunications Department under Raja at unbelievably low prices to some companies. This caused a loss of $39 billion to the exchequer, according to the federal auditor, comptroller and auditor general.

Spectrum is a finite resource, and with a sharp rise in the nation's mobile phone users, it has become scarcer, and, hence, costlier. Curiously, the licenses for the spectrum 2G, issued in 2008, were sold at 2001 prices, when the mobile market was many times smaller.

Equally controversial was that of the 122 licenses issued in 2008, 85 were granted to 13 firms that were not eligible at all in the first place. For they did not have the required paid-up capital. And 45 of the 85 licenses went to companies that were not primarily mobile telephone service providers. They reportedly got the contracts by submitting fictitious documents, and it is now being alleged that Raja received huge kickbacks.

In defense, Raja has been saying that lower prices merely helped consumers, who had to shell out lower call rates and so on. Also, he contended that the prime minister's office was kept in the loop.

Despite these charges that were first leveled at Raja as early as 2008, he was reappointed as telecommunications minister in 2009.

Raja is a member of the Dravida Munnetra Kazhagam (DMK), a key partner in the coalition which the Congress heads at New Delhi. The party's reason for not dropping Raja from the Cabinet earlier was fear that his party would pull out of the coalition, leading to the government's collapse.

However, this appears like an excuse, for the DMK depends on the support of Congress for its survival in the southern Indian State of Tamil Nadu, where it holds power.

Sadly, the scandal has tarnished Singh's image. Although he has had a reputation of being upright, honest and clean, the Raja affair has begun to cast its shadow on the prime minister. A point has now been reached when he finds it difficult to absolve himself of the blame of having retained a tainted minister for such a long time.

In fact, this is the reason why the Congress has been refusing an Opposition demand for an inquiry into the scam by a joint parliamentary committee. It has the mandate to call the prime minister for questioning, and the Congress is visibly nervous about a fallout from such a probe.

With the Congress refusing to say "yes" to this demand, there has been an absolute stalemate in Parliament for more than a month. No business can be conducted.

The Raja affair has also damned Indian media, casting a dark shadow on some of its brightest journalists, like Barkha Dutt.

Conversations between Niira Radia, a lobbyist for the prestigious Tata group of companies, and television journalist Dutt reveal "intense lobbying" by the company for Raja's reappointment as Telecommunications Minister in May 2009. Other conversations point to how Tata profited from the 2G scandal.

India certainly stands shamed, and sadly at a time when it is all set to glow.

Gautaman Bhaskaran is a Chennai, India-based journalist who writes for several newspapers across the world.