well done Mr. Sibal

If there was one minister that most of us agreed is doing justice to his ministerial berth along with Jairam Ramesh, it had to be Mr. Kapil Sibal and by trying to knock down the CAG report on the loss on 2 G spectrum allocation he has lost a lot of well wishers including me. The fact is that 2010 definitely was the darkest year for the Indian government and that the year saw numerous scams of different magnitude coming out but the 2 G scam was simply the biggest because of the huige difference an auction could have made to the exchequer. India is reeling under a huge fiscal deficit and this auction could have taken care of a major portion of that deficit.

Lets just analyze the main points of what Mr. Sibal said:

• He mentioned that there is no loss of 1.7 lakh cr as is being projected in the media, i dunno why any one did not question him when he made this comment as the CAG report clearly states that there was no loss due to the auction but the figure has been arrived keeping in mind the opportunity cost. This cost could have well gone up. Opportunity cost is a cost, though not in accounting.
• Secondly he said that this pricing mechanism of 2001 was correct in allocation of the spectrum, the sheer dynamics of the telecom industry changed between 2001 and 2008 and the number of subscribers increased almost 50 times in that time period, so there is a difference in scale that the telecos were operating. The government needs to look after the industry but not at the cost of people.
• Thirdly he said that keeping the cost low we could get lower tarrifs for the telecos, which is also untrue as the lower tarrif is the function of market and scale and that this had to happen looking at the opportunity that existed in the Indian market. Reliance and now tata Docomo got into this game.

The goverment has put their foot in its own mouth and yet again our competent journalism would never get after them. thank you Mr. Sibal, hum hai na tax dene ke liye.