No matter how the Manmohan Singh government spins the 2G Presidential Reference judgment, the principle at stake in the Supreme Court’s hearing on the allocation of natural resources was not the method of allotment but the need for transparency and fair play. Air and water, for example, are natural resources that no sane person would suggest allocating via an auction. But in the case of 2G spectrum and coal, the allocations made were arbitrary and often mala fide. The government gave the resources away knowing full well there was a better way of allocating them. Aiming to keep call and power prices low was an afterthought, a “policy” invoked to justify caprice. Senior Ministers are now hailing the court’s acknowledgment that the government has the right to allocate natural resources and that auctions, though preferred, are not mandatory. But even as they toast their “victory,” government managers ought to realise what the court has handed them is a poisoned chalice. Indeed, its opinion has placed new riders that will make it harder for discretionary powers to be abused. From now on, the state’s actions have to “be fair, reasonable, non-discriminatory, transparent, non-capricious, unbiased, without favouritism or nepotism, in pursuit of promotion of healthy competition and equitable treatment. It should conform to the norms which are rational, informed with reasons and guided by public interest, etc. All these principles are inherent in the fundamental conception of Article 14,” the judgment says, invoking the constitutional guarantee of equality.
This language makes it virtually impossible for the government to resort to any arbitrary process of allocating scarce, valuable resources, since methods like first-come-first-served, lotteries and beauty parades cannot even begin to pass the new tests. In essence, then, the government can have any process for allocation it wants, so long as it’s an auction. The order’s carefully worded tests on allocation allow an aggrieved party to approach the courts to get an unfair or capricious allocation set aside, even those involving auctions. After all, auctions too can be compromised, as some of the privatisation deals struck by the former National Democratic Alliance government most likely were. While the court said policymaking is the government’s domain, it added “the implementation of policy will be tested and interfered with when found wanting”. The government can celebrate all it wants, but the court’s opinion in no way diminishes the scam taint from 2G and coal. If anything, the court has dealt a blow to crony capitalism by making the process for future allocations far stricter.
Keywords: Supreme Court, natural resources, 2G scam, Presidential Reference, UPA, coalgate
Thanks for an excellent analysis! The govt. must not mislead people. It can't hide its real intentions any more. They are going to pay a hefty price for protecting and promoting crony capitalism. It's heartening that our judiciary at least at the Supereme court level is still functioning in true spirits.
Jai Hind.
The editorial is such a welcome simple and clear explanation of the ruling that it should be considered as an exemplary public service. This is especially so given the sophistry used by some senior ministers in interpreting the judgement to muddy the waters and belittle the seriousness of the scams and corrupt proceedings. The argument that the initial allocations (struck down by the court) kept the prices low for phone calls is spurious as evidenced by the reselling of the spectrum allocations by some within a very short period to generate huge profits. The politicians need to appreciate that the world is changing fast (faster than probably some of them can change their habits). The way the information technology is developing and spreading, ironically, the spectrum they sold will be the one that will expose every action of theirs for public scrutiny. They may run for a while but will find it impossible to hide.
Although coal can be classified as a natural resource, 2G spectrum is man-made bandwidth of electromagnetic wave. It is not a natural resource and nothing is there to rejoice over this.
My view is that the Supreme Court observation on 2G has only muddied the 'policy of allocation of natural resources ' waters by giving the benefit of doubt to the most corrupt govt. of independent India.
Instead, it should have castigated the govt. for its rampant and malafide misuse of the above policy , mostly to beneift the 'crony captalists' and in return fill up its party coffers as a quid pro quo.
This govt is not only enormously corrupt , but all its senior heads seem to exhibit a sense of shamelessness , in spite of volumes of damning documents already in public domain, indicating massive fraud and loot of public money .They seem to gloat over this judgement as some sort of a vindication of their policy and are attempting to prepare the ground to bail out the wrong-doers who are out on 'bail'.
Such confusing signals from the Supreme Court, which shines as the only hope for the masses now, does not quite augur well for a positive change for this country.God save India!!
The editorial gives an elucidation of supreme court order about
auction which is not the ultimate dictum for allocating natural resources and no other.It depends upon the type of product and its
viablity for distribution whether based on auction or any other method
dictated by the circumstances etc.Whether the distribution is either
by auction or any other means should be rational and not arbitrary
leading to glaring favours which benefit the allottee enormously. this
is where corruption starts. All moral codes and ethics which is
protected by constitution (clause 14 ) will apply.Therefore as the
editorial mentioned the present order is more stricter than before.
The supreme court order looks simple but has wider and deeper
implications. Any misgivings on the order should be cleared by the
media.
The Editorial is quintessential The Hindu - fearless in speaking the
truth, and spot on with its accurate interpretation of a landmark
judgement by the (now retired) CJI and other senior SC judges - no
less!
It beggars belief that some members of the Govt. dared to mislead the
citizens (in 2012) by claiming that the ruling vindicated their way of
allocating scarce and non-renewable national assets (ways which 'were
arbitrary and often mala fide' in the case of 2G spectrum and coal, as
the Editorial points out)!
Those sections of the other media who 'misrepresented' this important
ruling, showed at best a lack of comprehension of the English
language, and at worst performed a great disservice to the people of
the country - sadly, yet again.
“The only thing necessary for the triumph of evil is for good men to
do nothing.” — Edmund Burke (1729-97) -- citizens may like to
remember, if they wish to protect their future and that of their
children and their future generations.
The Supreme Court has said that when natural resources are alienated to private
parties for commercial exploitation the government should get adequate
compensation.But how can this be determined? For the party which wants to
commercially exploit the resource, the compensation it is willing to pay can be
calculated since it will be the present value of expected future earnings at its cost of
capital.It will use this data in an auction as the maximum it can bid. But there is no
way the government can decide an adequate compensation. Therefore for practical
reasons auction is the only feasible option. Any other method will involve arbitary
decisions by the government which creates problems as we have seen.
Usage of well-chosen words in the Supreme Court's 2G Presidential reference judgment makes it abundantly clear that there should be absolute transparency in allocation of natural resources like 2G and coal. Any wrong interpretation in this regard will be against the spirit of the judgment. The editorial,a true eye-opener, has laid stress on the fact that there is no scope whatsoever for any other kind of interpretation to suit the government's requirement.
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