The Supreme Court verdict cancelling all the 122 telecom licences that jailed former telecom minister A Raja had issued to eight firms in 2008 has unexpectedly opened up a new window that can help the government earn up to Rs 75,000 crore.
The revenue raised from the fresh auction of spectrum freed up after last week's SC ruling will come as a welcome relief for the government that has been struggling to find funds to spend on welfare programmes, including the blockbuster initiative to provide legally entitled cheap grains to about 63.5% of India's population under the proposed food security bill.
A government source said the Centre expects to earn between Rs 60,000 and Rs 75000 crore from the auction of telecom spectrum and licence fee.
The budget for 2012-13 will likely contain these estimates.
Sources indicated that the plan allocation for the social sector is likely to swell by more than 15% - nearly Rs 1,90,00 crore in this year's budget from Rs 1,60,887 crore last year.
"It is likely that the budget will contain figures for the planned expenditure for the food security scheme," said an official.
The food security bill is expected to cost the Centre an additional Rs 27,973 crore a year.
The unexpected windfall from the spectrum auction will help the government foot this bill, sources added.