Squarely blaming the CAG for what it said was a logjam holding back the country’s telecom industry, India’s telecom regulator has challenged the national auditor’s method of calculating revenue loss — `1.76 lakh crore — in the sale of 2G spectrum, which had triggered a huge political storm.
The criticism was a part of the new policy regime that the Telecom Regulatory Authority of India (Trai) recommended on Monday, calling for sharp cuts in spectrum price after two rounds of failed auctions for an industry paralysed after the 2G scandal, which greatly embarrassed the government.
“The estimate of losses based on presumptions has, in some measure, contributed to the pernicious atmosphere leading to the decision standstill,” the Trai said in a seven-page foreword to the recommendations on spectrum auction prices.
The regulator’s scathing remarks questions the Comptroller and Auditor General’s methods that calculated the government’s potential revenue losses — Rs. 1.76 lakh crore -- when it allotted 2G spectrum in 2008 in a controversial first-come, first-served policy.
The Supreme Court last year cancelled 122 telecom licences and ordered auctioning of the spectrum that the government allegedly allotted arbitrarily.
“While no one questions that there was indeed a loss, the egregious estimates of losses that were initially bandied about to sensationalise the issue no longer carry credence.”
Within the government, the lurking fears that motives will be imputed for any decision have had its own fallout. And, all of this has entailed real economic losses.”
“We must learn from history,” the regulator said.
Trai said “it is best to candidly accept that valuation of spectrum is difficult and not infallible”.
“Trying to estimate a price, say a 2023 valuation, for spectrum, would be foolhardy…Do we then presume that in selling spectrum on the basis of estimated value in 2013, we have incurred a presumptive loss?,” it said.
Quoting British philosopher Carveth Read who observed that “it is better to be vaguely right rather than exactly wrong”, the regulator said it couldn’t allow itself to be bogged down by “misplaced fears of prospective hypothetical losses”.