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Monday, 05 March 2012 00:00
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Govt goes back to ‘level playing field’ again

The government is being disingenuous when it says it is not seeking to annul the cancellation of 122 licenses, but is asking the SC to review its ruling on auctions being the only method to transfer/lease national resources. Apart from the issue of A Raja tweaking the first-come-first-served (FCFS) rule to decide who got licenses, the real problem was charging a 2001 price in 2008 and that too when there were 545 applications for just 122 licenses – since there are generally more takers than there are national resources, the SC favoured auctions. Indeed, since the government thought there would be many takers for its ONGC shares, it too plumped for auctions just last week – that there were no takers is a different matter, but the government also favours auctions in most cases and it got over Rs 1 lakh crore in 2010 by auctioning 3G/BWA. By voting for FCFS again, the government is effectively saying that while it has a problem with Raja deciding which firms benefitted, it doesn’t have a problem if another lot of firms got the same benefit! 

While rooting for FCFS, the government makes the old Raja arguments that have been rejected by the courts four times already – once by a single-judge bench in the Delhi High Court, then by the division bench and the SC in the STel case and once by the two-judge SC bench against which the review petition has been filed. The level playing field argument made is that if a new player has to pay more than an old one, he will never be able to compete. While that sounds attractive, in essence it means every steel plant in India must be given captive iron ore mines to be able to compete with Sail and Tisco, that every new land sold by the government must be at the same rate as in 1947 and, indeed, in the same location ... never mind that Vodafone never raised tariffs after it paid $11 bn for Hutch’s India operations and is the second-largest player despite this. The argument about wanting to give licenses out at low values to encourage greater telecom penetration in rural and semi-urban areas is equally specious since it is the older non-Raja firms who have the highest penetration in these areas, indeed Bharti Airtel has more rural subscribers than even the state-owned BSNL.

Nor is it correct that, under the Constitution, the SC cannot review government policy. For one, even in cases like reservation that were provided for in the Constitution, the SC has interpreted this and put a ceiling to reservation – Article 142 gives the SC the widest of latitude to ensure ‘complete justice’. More important, there is a vital distinction between a policy and a decision. Allowing private sector into defence production is a policy, deciding how to select a firm is a decision. Couching all government decisions as policy is just a way to avoid judicial review.



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