The Union finance ministry’s recent directive to double the reserve price of spectrum for 3G services from Rs2,020 crore to Rs4,040 crore is a step in the right direction in the sad story of spectrum auctions.
As always, the department of telecommunications (DoT) is finding creative ways to overcome good advice. In this case, it has argued that doubling of reserve price may require the approval of the Telecom Regulatory Authority of India. Fears have been expressed that it may further delay the process of spectrum allocation. Such arguments brook no consideration.
At a time when the government is forgoing huge sums of revenue on account of stimulus packages, if a delay in spectrum allocation has the potential to fetch it a tidy amount of revenue, then such delay is tolerable. In fact, this money could prove handy in plugging the dangerous gaps in government finances due to the high fiscal deficit.
In any case, the last few months of an outgoing government require more caution than urgency of the kind being advocated by DoT.