He also said he did not agree with the controversial Finance Ministry note which suggested that Finance Minister P Chidambaram could have insisted on auctioning the 2G spectrum.
Subbarao, who appeared before the JPC as former Finance Secretary, said that there could be loss due to procedure followed in issuance of licences. However, the pecuniary loss depends on what assumption one makes.
He maintained that if the government decides to issue licences at less than market price in order to increase tele-density and maximise welfare then it will not imply financial loss, JPC Chairman P C Chacko said quoting Subbarao.
While conceding that revenue maximisation and welfare maximisation were two different things, Subbarao told the JPC that if the government decides to allocate licences at a particular price, then it is a legitimate decision and does not involve loss.
Subbarao, who was Finance Secretary between April 30, 2007 and September 4, 2008, told the panel that he was in disagreement with the March 25, 2011 note of the Finance Ministry to the Prime Minister which suggested that Chidambaram could have insisted on auctioning the 2G spectrum instead of it being allowed to be allocated on first-come first-served basis.
Chidambaram said in a meeting with then Telecom Minister A Raja on January 30, 2008 that "he was for now not seeking to revisit the current regimes for entry fee or revenue share" of spectrum, the note said. (MORE)