Edit: Rebuke to crony capitalism

The Supreme Court judgment cancelling 122 2G licences issued in January 2008 under former telecom minister A Raja has done what the UPA government should have done but did not. The court struck down the licences, saying they were given out arbitrarily, that the minister had gifted them away.

The court’s decision corrects the wrong committed by the UPA government and its errant minister. The government cannot deflect the sharp criticism that the judgment carries.

Telecom Minister Kapil Sibal’s defence that the Atal Bihari Vajpayee-led NDA government is to blame is lame. He forgot that PM Manmohan Singh had constituted a group of ministers to review the NDA government’s policies. The truth is that under compulsions of what he later called coalition dharma, Singh diluted the terms of reference, and paved the way for A Raja to loot the exchequer.

The court has raised important legal aspects regarding the Telecom Regulatory Authority of India (Trai) policy recommendations. It has termed Trai’s recommendation of a first-come-first-served policy faulty and asked it to make fresh recommendations. The question is if the court can review policy and not just the illegalities in its implementation. The court says if policy is unfair, it can question its validity and even quash it. The court also faulted and penalised companies for offloading shares at a rate much higher than what they paid as fee. The question is not whether they can offload shares, but if they gave greed free rein and introduced an element of unfairness.

The verdict is a rebuke to crony capitalism which was what Raja’s ministerial discretion amounted to. The apprehension that it would affect corporate — national and international — confidence in liberalised India is misplaced. Rather, it ensures fairness and transparency, which is the cornerstone of a successful market economy.