New Delhi, Feb. 16: The Prime Minister, Dr Manmohan Singh, on Wednesday said he did not insist on an auction of 2G spectrum as the telecom ministry, the finance ministry then headed by Mr P. Chidambaram, the Telecom Regulatory Authority of India and the Telecom Commission had all said that licences should allotted at the old prices.
Interacting with editors of TV channels, Dr Singh said that in November 2007, he had asked Mr Raja to look at the possibility of having an auction of spectrum.
“One of the issues that I asked him to look into was the possibility from the legal and technical angle of having an auction of spectrum. Mr Raja wrote back to me almost on the same day, or our letters crossed. He said, I have been absolutely transparent in my dealings, I will be so in the future, and you have my assurance that I have done nothing and will do nothing which will not be consistent with the promise that I am making.”
The PM said that Mr Raja also told him, “The Trai’s advice, Telecom Commission’s advice and his own view was that auctions are not the way forward at least for 2G spectrum, and he also mentioned in a subsequent letter that he is agreeable to auction of 3G spectrum. But with regard to 2G spectrum, he was very clear that he should stay with the then existing approach.”
“This was also discussed with the finance ministry because in terms of the Cabinet decision of 2003, the pricing and allocation of the spectrum was to be settled between the ministry of finance and the telecommunication department. Initially, of course, the ministry of finance did ask for a high price for 2G spectrum but after many discussions I think the two ministries agreed that as far as 2G is concerned we have to live with the present system, particularly with regard to the amount of spectrum built and embedded into the licence agreement.”
Explaining why he did not feel the need for an auction, the PM added: “This is the background why I did not proceed further with this matter of pricing of spectrum, because if the ministry of finance and ministry of telecom both agree and they have the obligation of the Cabinet decision of 2003 to decide on the matter and also since Trai is an expert body and Telecom Commission has experts, if all of them are of the same view, I did not feel I was in a position to insist that auctions must be insisted.”
Stating that “licences were not a matter which got referred to me or to the Cabinet, that was the decision exclusively of the telecom minister,” the PM said, “who got the licences... how first come first served was implemented, this was never discussed with me nor was it brought to the Cabinet. This was exclusively the telecom minister’s decision,” said Dr Singh.
As for the CAG report, Dr Singh said: “The existing policy of the government was that auction should not take place. If auctions are not taking place then what is the basis for you to calculate the loss,” said Dr Singh.