AUCTION OF RESOURCES
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    • AUCTION OF RESOURCES
    The buzz in the twitter world is the resources generated through auctioning of spectrum and coal mines in excess of Rs. 3 trillion, which otherwise would not have accrued to the State Exchequer. What is left not said, is that it not BJP or more precisely Modi’s brain child to auction natural resources. It was being debated in babudom for some time. But since there was a lurking fear that it could push up cost of products and services based on the resource sold/leased, Executive avoided it. The most vociferous advocate of free market, anti corruption crusader, brave journalist rolled in to one Arun Shourie followed FCFS while he was Telecom/divestment minister. He even sold ITC properties for a song and yet survived media wrath. Even he did not find fault with Andimuthu Raja’s following his own policy but faulted the implementation. The spectrum war was initiated by Mittals who wanted Tatas not to get it. Maran in his stint avoided giving spectrum to TTSL on the ground of lesser subscriber base. At this point of time our media friends sought to help Ratan get a foothold thru lobbying. Niira Radia arrived and then you saw the various ugly faces of media/industry leader/politician nexus in the leaked tapes. Today even SC has forgotten the case. Media has buried it. When spectrum was to be sold, every Telecom operator from Ambani wanted it free while Ratan said a fair price of Rs.1000 crore for spectrum licence. Then the modern day messiah CAG Vinod rai breached all conventions and treaded in to policy area reserved for Executive and exploded a theory of enormous loss amounting to Rs 1.73 trillion due to Raja and his ministry. An obliging media started the war, besirmiched many a reputation and led to a resounding defeat of UPA-II. People forgot that Ashok chawla committee recommended auctioning of natural resources and agreed it could push up costs for which it recommended a transparent provision of subsidies. Whether to provide continual subscriber subsidies or give up one time licence fee was an executive decision which the UPA government did. In the Presidential reference, SC agreed that allotment of natural resources is certainly an executive prerogative. It excluded spectrum because it had invalidated 124 odd licences in an unprecedented judicial order.

    Again the sums that will be accruing to the government is over a time frame of 30 long years- the period of mining lease in the case of coal. If the so called windfall is discounted at 10% as Surji Bhalla claims, the money that will be accruing is miniscule.  Reliance power still refuses to supply power at rates of 2.10/kwh at Krishnapatnam due to increased fuel costs from its Indonesian coal mines. What if tomorrow your PPP producer wants tariff revision because coal cost has gone up? Who will be affected? But the power minister claims tariffs will fall. If the ruling dispensation believes that there has been a spurt in revenue due to auctioning, then why should sell PSU stocks at all? Come on be honest.

    Pramod Mahajan was the minister when auction for mobile telephony happened.( If my memory serves right it was Jagmohan who was removed at the behest of telecom lobby for he was uncompromising)  Bids were for astronomical figures by companies like Essar, BPL etc who are now nowhere to be seen. They cried before NDA-I and government swiftly moved from fixed licence regime to revenue sharing regime. RIL was allowed backdoor entry to mobile telephony thru WiLL licence and Mahajan collected a paltry Rs.100 crore penalty. Even an ardent BJP admirer like Gurumurthi wrote that this should not have happened. 3G auctions fetched enormous revenue but the Industry has reported a very low patronage for 3G services for obvious cost issues. 2G improved teledensity from a low of 18% to 80% and the social benefits which the federal auditor was not concerned will outweigh the so called losses. In India, media can blow things out of proportion. What happened to ISRO Espionage case foisted on Nambi Narayan, the moily tape episode conveniently arranged by a wily RK Hegde which killed moily’s political career, Bofors scandal which catapulted an in efficient VP singh to cleaner than Mr Clean status all are media creations.
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