PM’s silence sickening; BJP breaks silence.

published on May 20, 2010


Press statement issued by BJP National Spokesperson, Smt. Nirmala
Sitharaman on auctions for the allocation of 3G Spectrum

Yesterday the auctions for the allocation of 3G Spectrum were completed. The auctions have realized an amount of Rs. 67,710 crores for all Circles of the country. The auctions necessarily involve a process where the market mechanism determines the real cost of the asset being sold. Spectrum is a valuable national asset.  It belongs to the Government of India. When it is sold for user and exploitation to the private parties, the Government must necessarily get the market price of the spectrum. The national debate and the serious allegations that followed after the allocation of the 2G spectrum have compelled the Government to dilute the authority of the Minister for Telecom, Shri A. Raja, eliminate discretion in determining the prices and substitute the whole process by a transparent auction. At a time when the fiscal deficit of the Government of India is record high, realization of high values will sub-serve the economy for the better.  
 
    The question which concerns us now is if the 3G spectrum can earn for the Exchequer the amount of Rs.67,710 crores, why should the 2G spectrum had been allotted in 2007-08 at a price of Rs. 1651 crores for an All India licence.  The argument of the Telecom Minister, Shri A. Raja, that “the difference between 2G and 3G spectrum is a difference between PDS rice and the Basmati rice” is astonishing.  The PDS rice is distributed to the economically deprived. The 2G spectrum was allotted to Reliance Communications, Airtel, Vodafone, Swan Telecom, Videocon, Unitech etc.  Surely these are not deprived sections of the society, which needed to be subsidized by Shri A. Raja for the allocation of the 2G spectrum.  
 
    The 3G spectrum will be utilized because of its advanced technology by the economically more privileged.  It thus earned a High valuation. As against this, the 2G spectrum commanded huge valuations because of much larger volumes would have used the spectrum.  The high value of the 3G spectrum is a pointer to a possible under valuation at which the 2G spectrum was allotted.  
 
    Obviously, the 2G spectrum was sold for a song. Two of the allottees diluted their equity immediately upon the allocation of spectrum.  The licence and the spectrum which they obtained for Rs.1651 crores acquired a valuation of two billion dollars i.e. over Rs. 9,000 crores for dilution of equity.  Nine All India licences were allotted on this price.  Even on this valuation the loss was over Rs. 60,000 crores.  
 
    If a high valuation of the 3G spectrum have a potential to marginally reduce the high fiscal deficit, the fiscal deficit would have further been reduced if the auction route had been followed for 2G spectrum.  
 
    The loss caused to this country by Shri A. Raja through his acts of corruption and nepotism is a huge loss.  How long the Prime Minister look the other way and pretend that nothing has happened?

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