2G auction a success, Sibal and group silenced
The tremendous success of the 2G Spectrum auction is a resounding slap in the face of zero-loss theorists such as Union Minister Kapil Sibal and other senior Congress leaders who had claimed that the Government had incurred no losses when it distributed the spectrum on a dubiously implemented first-come-first-serve basis in 2008. On Thursday, the public exchequer earned a whopping Rs 61,612 crore upon the conclusion of a 10-day-long auction process that saw 68 rounds of bidding. This is about 50 per cent more than the Rs 40,000 crore the Government had hoped to earn this fiscal from the telecom sector, including licence fees and spectrum charges among other payments, according to Union Budget estimates. Of course, the Government will not receive the entire amount in one shot — the money will flow in over a period of 20 years — but still, the upfront payments from the telecom companies will help bridge the fiscal deficit significantly. In fact, the earnings from the auction should help the Congress-led UPA regime to meet its target of keeping the fiscal deficit to 4.8 per cent of the Gross Domestic Product. This, no doubt, gives Union Minister for Finance P Chidambaram a reason to smile, although it is ironical how Mr Sibal has been gloating about it all. let us not forget that when the Comptroller and Auditor-General had pegged the losses from the 2G scam at Rs 1.76 lakh crore, the senior Minister and other Congressmen had scoffed at the figures. They took the high moral ground, proclaimed that the Government's aim was not merely to increase its revenues but ensure public welfare, and sought to justify that somehow the larger good was best served by throwing away precious national resource at dirt cheap prices. The zero-loss theorists, in fact, persisted with their financial chicanery even after the Supreme Court in 2012 cancelled all the 122 telecom licences that had been fraudulently distributed by then Telecommunications Minister A Raja and ordered that the licences be re-sold to the highest bidders. Subsequently, two auctions were held — in November 2012 and then in March 2013. Together, they fetched just about Rs 10,000 crore. Each time the zero-loss theorists touted the paltry earnings as a vindication of their half-science arguments. But it was clear to even the layman that auctions failed because the Government had set the base price too high. Some say that the UPA regime had wilfully done it to scuttle the auctions and cut the CAG down to size This is a classic case of cutting the nose to spite the face.
Some have criticised the high prices at which spectrum has been sold on the ground that the telecom companies will now pass on the costs to the consumers. This argument holds no water for two reasons. First, the telecom companies will be paying the Government over a long period of time, so they will not suffer any sudden financial shock. Second, as history stands proof, the consumer's interest is best protected by free market competition. Additionally, when compared to the rates at which 2G Spectrum has been sold in other countries, the prices here are not exorbitant, especially when considering that India has one of the fastest growing telecom markets in the world.