Planning Commission Deputy Chairman Montek Singh Ahluwalia has opposed the move for making a Presidential Reference on the 2G telecom case. He has said the government should implement the Supreme Court order cancelling the spectrum licences and complete the auction in good faith.
He has also suggested a Group of Ministers be constituted to consider complex issues such as pricing of spectrum, which could consider options from the telecom ministry and then make recommendations to the government. A fortnight ago, the Cabinet discussed the possibility of making a Presidential Reference to the Court on its 2G judgment, especially on issues such as auction of scarce natural resources and the first-come, first-serve method. It deferred a decision on the ground that the Solicitor General could be called to give his views on the complex issues. The government has filed a review petition on the court judgment, delivered in the first week of February.
“There is nothing to be gained by making a Presidential Reference on the lines of the draft. If a reference has to be made, it must clearly state the government’s position on key issues but I do not know if that would be appropriate,” Ahluwalia said in a letter to Prime Minister Manmohan Singh recently.
He said if the government itself was unclear about some aspects of policy like pricing of spectrum, then it should first clarify its position. The Telecom Commission, comprising officials, was not the right forum to use for evolving solutions to these complex and possibly controversial decisions, he said.
On balance, Ahluwalia said the best course of action may be to implement the order of the court cancelling the licences and complete the auction in good faith. “Challenges regarding past licences can be met in court with a clear indication of our position on the need for stability in policy. Decisions on pricing should be taken by a Group of Ministers/Cabinet, if necessary,” he said in the letter, copies of which were sent to the ministers of finance, home, telecom and law.
In his letter, on the question of whether the government should move for a Presidential Reference and in what manner, Ahluwalia said the reason for it seems to be the belief that unless certain issues are clarified, the government may be forced to reopen decisions on earlier licences that were not issued on the basis of auction. And, the court’s clarification may be needed on certain aspects even to proceed with the auction. “I am not convinced these concerns are valid. I also feel raising these issues will create unnecessary problems,” he said.
Expressing himself against posing a question on whether earlier licences given without auction were illegal or not, he said government does not need to interpret the judgement broadly as possibly negating all non-auctioned allocation.
This, he said, would go beyond telecommunication and would also require cancellation of earlier mining leases but which had not been included in the draft reference.
“The reference as currently drafted will only provoke headlines to the effect that the government is unclear about policy and this is bound to aggravate uncertainty about what the government will do to these licences,” he said.
On pricing of spectrum, Ahluwalia said the government needs to be clear whether it was choosing to introduce pricing because it increases the flow to the exchequer. In that case introducing pricing will seem reasonable.
However, while revenue flows are an important element of public interest they are not the only element.
“We should keep in mind mind that particular action would have on investor confidence and therefore on the economy. Unfortunately, the prevailing atmosphere of suspicion and the fear of criticism by the CAG, fed by hysterical press reporting, all too often leads to officials recommending the option least likely to attract criticism. That need not be the best for the country,” he said. Making a Presidential Reference also poses problems if there is a delay in responding on the part of the court as happened in the case of Punjab Reference in 2004, which is still pending. “This will make it difficult for the government to act until the court has responded since any action taken will seem colourable, given the implicit admission of our own uncertainty about the legitimacy of such action,” Ahluwalia said.
