New Delhi: The government is not sure if it can conduct a third generation (3G) wireless spectrum auction by the end of March, officials said on Tuesday, increasing the risk of widening the country’s fiscal deficit for the current fiscal.
Both cabinet secretary K.M. Chandrasekhar and finance secretary Ashok Chawla said issues that had delayed the auction beyond 14 January had been resolved but neither offered a new date. “I can’t say whether the actual auction will happen before 31 March,” Chawla said.
The government had pegged the fiscal deficit at a 16-year-high of 6.8% of gross domestic product in the current fiscal ending 31 March, after factoring in the estimated $7.6 billion (Rs35,112 crore) proceeds from the auction.
No date set: Cabinet secretary K.M. Chandrasekhar. Madhu Kapparath/Mint
“There is every risk of overshooting (the target).” Abheek Barua, chief economist at HDFC Bank Ltd, said, but added there was no sign yet this would happen.
Officials have said revenue receipts may not be as buoyant as expected, although, Chawla has said the fiscal deficit for the current year would be cushioned by better-than-anticipated proceeds from stake sales in state-owned companies.
India has completed a record Rs4.51 trillion gross borrowing programme for 2009-10 and has not made any new proposal to tap the markets for the rest of the fiscal year.
The auction of 3G spectrum had been delayed over differences between the ministries concerned, including the defence ministry which holds much of the air waves.
“I don’t think it really particularly matters if (the auction happens) this year or next (fiscal) year,” Chandrasekhar told reporters. “I think they will take a decision based on how you (the government) will maximize your (government’s) revenue.”