The spectrum allotment saga is back where it always belonged — at the centre of controversy. The Central Vigilance Commission has raised questions about the manner in which the 2G telecom licenses bundled with spectrum were given away in early 2008, and the CBI has raided the telecom ministry offices and the premises of select beneficiaries. It has done India — an emerging global power and one of the fastest expanding telecom markets — little good for its image in that we could not get our governance right in so vital an area of economic policy.

The burden of this article is not about the suspected corruption in this episode; that is the area for the vigilance organisations, and we hope (though, piously and against past experiences) that the guilty will be brought to book. On the other hand, the concern in this article is on the policy issue — how in the face of global experiences and economic logic, a seriously flawed route was pursued in favour of administrative and arbitrary allotment of spectrum instead of giving it out through competitive bidding.

Spectrum is a valuable and non-renewable natural resource; it belongs to the people of India. It should be allocated to those who can make the most efficient use of it and will not trade or hoard it. And it should fetch the state a fair, neither too low nor exorbitant, market price. The best course for determining the fair price is through competitive bidding. Other natural resources such as oil, gas and coal, even the concessions for infrastructure projects under the PPP model like airports, bridges and highways, are auctioned by us. What justification then is there for not following the same principle for spectrum? This has never been properly explained by the telecom authorities to the public.

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