“Policy aimed at maximising growth and competition rather than generating revenue”

Questioning the methodology adopted by the Comptroller and Auditor-General (CAG) in arriving at the figure of Rs. 1.76-lakh crore presumptive loss on account of allocation of 2G spectrum to telecom operators, Union Telecom Minister Kapil Sibal on Friday said “consistent policies since 1999 were aimed at maximising growth and competition, rather than generating revenue, and minimising tariffs.

“Indian customers actually benefited by the policy as we have the world's lowest tariff's, which fell from Rs. 32 to 30 paise per minute because of competition. Citizens have been empowered by way of connectivity and employment, which cannot be estimated in value terms,'' he said.

Mr. Sibal claimed that the annual benefit to the people was to the tune of Rs. 1,00,000 crore.

On revenue implications, the Minister said these were amounts foregone over the years, rather than revenue losses, whether it was the ‘migration package' from fixed licence fee to revenue sharing, progressive reduction in licence fee or low entry fee.

He said all operators had been given start-up 4.4 Mhz spectrum, which came bundled with licence and no charges were paid for this frequency.

No operator/licensee had been charged for the start-up spectrum of 4.4 Mhz, be it in 1999, 2001, 2003, 2005, 2007 or in 2008. The CAG calculated the “presumptive” losses on the basis of 6.2 MHz spectrum as against 4.4 MHz, which was allotted to dual technology licensees. “Presumptive loss” against spectrum beyond 6.2 MHz should not have been considered as the allotment of additional spectrum (post-January 17, 2008) was subject to pricing as determined in future, he explained.

Mr. Sibal claimed that in 1999 a change in policy by the NDA regime from fixed licence fee to a revenue sharing regime caused a ‘net' revenue loss of Rs. 1.50 lakh crore. But we need to stack the losses and benefits of the policy to decide on the outcome.

Also, 2G spectrum was subject to availability. On average, allotees of 2008 (and even earlier) have received spectrum after a gap of a year, therefore 2G spectrum is available on average for 19 years instead of 20, he said.

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