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Updated: February 29, 2012 00:17 IST

Pranab-headed high level group studying issues post 2G verdict

Sandeep Joshi
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Union Finance Minister Pranab Mukherjee.
Union Finance Minister Pranab Mukherjee.

It will decide on further course of action to be adopted by government

Clearly understanding the implications of the Supreme Court order cancelling all 122 telecom licences issued in 2008, Prime Minister Manmohan Singh has formed a high-level group, headed by Finance Minister Pranab Mukherjee, to look into larger issues emerging from the historic judgment that will have an impact not just on the Department of Telecommunications (DoT) but also on the functioning of other departments.

The government is trying to understand the judgment that questions the policy of allocating scarce natural resources. In its ruling, the Supreme Court found serious faults in the ‘first-come first-served' (FCFS) policy adopted to allocate spectrum to firms.

Significantly, a similar policy is being followed by other government departments to allocate other natural resources. Though the apex court did not clarify whether the indictment of the FCFS policy was limited to the telecom sector, the government is in a bind, as similar decisions in other sectors could draw the court's ire. It is learnt that the government might seek a presidential reference to get clarity on the issue.

On the other hand, as per Dr. Singh's directions, a group of technical and legal experts formed by the DoT is studying the matter and identifying legal options to make recommendations regarding the “course of action to be adopted [after] duly analysing the pros and cons of each course of action.”

Government sources say that the expert group has come out with some recommendations and soon the high-level group that comprises Telecom Minister Kapil Sibal, Law Minister Salman Khurshid, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Attorney General G. Vahanvati, will decide on the “further course of action to be adopted” by the government.

While the government has to look on the overall implications of the court order, the DoT is grappling with all the nitty-gritty of the matter. Besides the issue of overall policy, the Centre is also under pressure from nations whose firms after having invested heavily in the telecom sector now find the licences of their Indian joint venture partners cancelled.

Notably, two Gulf-based firms — Etisalat of the UAE and Batelco of Bahrain — have decided to pack their bags and leave, but Norway's Telenor and Russia's Sistema have decided to fight it out. The government is now forced to walk the tightrope in order to save diplomatic relations besides honouring the court's judgement.

On the other hand, the DoT has other issues to decide upon — to meet the four-month deadline to complete the spectrum auction process; decide the fate of 3G operators whose 2G licences now stand cancelled; action to be taken in case of licences issued between 2002 and 2008 as per the FCFS policy; and deal with dual technology players who were also given spectrum in 2008.

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