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Tuesday, Oct 22, 2019

Calling in all the markers

The 3G auction has left the UPA on cloud nine. With the extra funds, it can balance its books.

india Updated: May 20, 2010 22:10 IST


There’s nothing as sweet as being overwhelmed. Which is pretty much what the government should be feeling now that it’s set to earn a revenue of Rs 67,718.95 crore with the auction of the 3G telecom spectrum having ended successfully on Wednesday.

The government had budgeted Rs 35,000 crore in the fiscal bill, an amount that was to be adjusted against the fiscal deficit. Now that it has got Rs 32,218.95 crore more in its kitty, it will help in an earlier-than-expected return to fiscal consolidation. No wonder Finance Minister Pranab Mukherjee is pleased as punch. The fiscal deficit mirrors the extent to which the government is borrowing to fund current expenditure. High levels of debt set a limit to the headroom that the government can have on spending on development programmes. So at last we may be truly on our way not to shifting money from one pocket to another but to generating cash that will fuel much-needed social security. Besides this windfall, the government can also expect to earn at least Rs 20,000 crore more by the auction of spectrum for broadband wireless access that is scheduled to commence from Saturday. So it may earn a very healthy Rs 88,000 crore or so from the cumulative auction of spectrum. Having budgeted for a net fiscal deficit of Rs 345,000 crore in 2010-11, this looks like a healthy figure indeed.

For the consumer, 3G is expected to usher in a revolution. Subscribers can get high data services such as mobile television, video on demand, video calling and video conferencing on their mobile phones. Now for the consumer economics of the new paradigm. The State-owned MTNL launched its services last year. It charges at the rate of half a paise per second for a video call. Though the spectrum price may appear to be on the higher side, this will not have any impact on the tariff as there will be a minimum of four players in one service area. So the competition is bound to drive down the prices. Operators will also introduce services at low prices to make it popular.

The challenge will be to fill the gap in mobile content. The operators should support content-providers. And thus will begin a new, exciting chapter in India’s telecom story. Not to mention — and we’re keeping our fingers crossed on this — in India’s social development programmes saga.

First Published: May 20, 2010 22:09 IST

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