Spectrum auction belie zero loss presumptions, says Arun Jaitley

With the telecom spectrum auction fetching a record Rs 109,874 crore, Finance Minister Arun Jaitley on Wednesday took a jibe at Congress leader Kapil Sibal, saying the 'zero loss' theory has been belied.

"I am glad that the presumptions that some people had, that spectrum is worth zero, have been belied," Jaitley said speaking at an event here. Sibal, as Telecom and IT Minister in the previous UPA government, in January 2011 had stated that there was zero loss to the Government as a result of giving away second generation or 2G telecom licences to new players on first-come-first-serve basis in 2008.

He had made the comment at a press conference to contradict a report from the Comptroller and Auditor General (CAG) that had put the loss to exchequer from not auctioning the scarce spectrum, which carries telephone calls and data, at Rs 1.76 lakh crore.

Terming the CAG report as erroneous, Sibal had then said that there was no loss to the Government, as the calculations done by the CAG had to be discounted for various factors, including time value of money and difference between 3G and 2G spectral efficiency.

In the auction that closed today, the government received provisional bids worth Rs 109,874 crore at the end of 115 rounds of bidding spread over 19 days. Winners will have to pay a quarter to a third of the winning price within 10 days and the rest by 2027. Spectrum revenue is key for the government to plug its fiscal deficit. Asked if any of the spectrum revenue would flow in during the current fiscal, Jaitley said, "I do hope the payments start coming in."

Also Read: Day 9: Total spectrum bid value remain at over Rs 1 lakh crore