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2G flop show: ‘Hen that laid golden eggs destroyed’

Last Updated: Saturday, November 17, 2012 - 09:22

Zeebiz Bureau

New Delhi: Telecom Minister Kapil Sibal on Friday termed the poor response to the 2G spectrum as the “hen that laid golden eggs destroyed” and argued that policy is best left to the government.

Taking a dig at the Comptroller and Auditor General (CAG), which had in its audit report put the presumptive loss due to faulty auction of 2G spectrum at 1.76 lakh crore, Sibal said, “Where are those Rs 1 lakh 76 thousand crores? Govt getting revenue cannot be the sole criteria.”

“You cannot extrapolate figures and sensationalize them and destroy the hen that laid the golden egg…Sensationalism took over and government was limited in its policy prescriptions which has resulted in what we saw a few days ago,” he said.

The telecom minister was referring to the lukewarm response to the Supreme Court mandated auction of 2G spectrum. As against (CAG's) estimation of over Rs 34,000-crore, the telecom department got bids of just Rs 9,407-crore. The government had fixed the reserve price for the spectrum at Rs 14,000 crore.

He said that TRAI had recommended a reserve price of Rs 36,000 crore but the Empowered Group of Ministers (EGoM) had lowered it as it was too high.

Sibal also made it clear that saying there will be another round of bidding.

"Of course, there will be an auction. There is no doubt about that. What procedure we follow for that auction is something we will decide in another few weeks," Sibal told reporters here.

He said the government did exactly what the courts wanted it to do -- that is sell the airwaves, or radio frequency spectrum, that was vacated after 122 licences and accompanying spectrum issued in 2008 were cancelled by virtue of a Supreme Court order.

"We are not here to score points. Our point always was that market dynamics should be allowed to play out. The moment you start dealing with market directly or indirectly it will be bad. The government's wisdom should only intervene when required," he said.

"The purpose of the government is to ensure development and to ensure prosperity. We are not here to feel vindicated," he said.

"The consumer has not benefited at all because the nature and the kind of investments that ought to have gone into the sector have stopped and the sector has been in debt," he added.

With Agency Inputs

First Published: Friday, November 16, 2012 - 14:16
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