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Spectrum auction may bring fiscal bonanza

india Updated: Feb 06, 2012 01:24 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times
Highlight Story

Barely 45 days before the presentation of the budget, the Supreme Court ruling favouring fresh auction of 2G spectrum has opened up an unexpected window of earnings for the government, hit by slumping revenues, rising expenditure and mounting debt.


The government is likely to peg revenues from the auction of telecom spectrum at between Rs 60,000 crore and Rs 75,000 crore in the budget for 2012-13, although the final estimates are still being worked out, government sources told Hindustan Times.

The additional revenues will also help keep its borrowings under check, particularly to meet additional expenses from new welfare schemes in the next fiscal, including those that will arise out of proposed Food Security Bill.

"The final estimates of the revenue that the auction of 2G spectrum will fetch will be worked out by the end of this month," said an official, who did not wish to be identified.

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The Telecom Regulatory Authority of India (TRAI) on Friday released a pre-consultation paper on allocation of airwaves in the 2G band by auction. It asked all stakeholders to give their comments by February 15.

A ministry source said initial estimates suggest the government expects to earn about R45,000 crore from the fresh auction of the spectrum freed up after the SC ruling scrapping 122 licences across 22 circles.

The auction will fetch the government significantly higher than what it had earned while allotting the start-up spectrum to the operators on a first-come-first-served basis at Rs 1,650 crore per licence for pan-India spectrum in 2008. Both the low price and the manner of allocation were at the heart of the 2G spectrum scandal.

The Centre also expects to earn Rs 30,000 crore more from the auction of another 20 MHz of broadband spectrum and recurring licence fees and other usage charges from the telecom sector. These revenues were budgeted for in 2011-12, but did not materialise.

In 2010, auction of 3G and broadband spectrum fetched the government about Rs 106,000 crore-three times what it had budgeted to earn.

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