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GOING GOING GONE
The week belonged to 2G. Not one but four of them. The spectrum scam stole the limelight, but equally significant were three other 2G’s — GUESSING GENERAL, GRAFT GUILT and GAS GRIND.
First the Spectrum scam. The Supreme court disconnected 122 telecom licenses. Decisions on bilateral dispute are bound to hit one and be a hit with the other. Decisions with a multilateral impact invariably end up with the most unsuspecting taking the hit. In this case it was the foreign investors and the cell phone customers.
While foreign investors would appreciate a business environment with a strong legal system keeping a check on mis governance they find themselves punished without being at fault. After all, they had in good faith invested into companies who had obtained genuine licenses issued by the Government. Going forward, how can they trust any Government document? And if not the Government who do they trust? Then, 70 million customers have to log out and log in elsewhere.
Existant unaffected operators (EUO)are at loggerheads to get them. Number portability would help. However, fewer operators amidst high demand and high license fees would inevitably mean higher charges. You could expect your phone bills to rise by a fourth in the near future. This would mean a bonus for the EUO’s — more customers, higher tarrifs and additional spectrum. For them higher incomes would make the verdict a great incoming call. Their stock prices have jumped.
On the flip side, stocks of banks who have lent around Rs 30,000 crore to affected companies were dumped. For them the verdict became a sell call. The biggest beneficiary as opposed to public popular perception has actually been the Government, more so the Congress party. Raja has been almost isolated at fault.
Chidambaram has been given a clean chit. The Government gets an income from confiscations amounting to almost Rs 14000 crore and 536 MHZ of 2G spectrum worth many times more — sale of which could help reduce the fiscal burden, climbing in the wake of falling tax revenues, high subsidies and no major disinvestment. This is a pre-Budget bonanza. For them the decision truly becomes a VAS – value added service. Net Result – customers migrate, Government celebrates , operators consolidate. For foreign investors the verdict comes like an SMS – Shock Message Served.
They have no doubt been wronged and can now only write. Write a plea to the Government or the court or simply write off the losses. They have the option of writing aggressive cheques in the upcoming re auction. No likely redressal for vendors, trade partners, employees or tower companies associated with the affected companies. For them the verdict means a hang up.
GUESSING GENERAL – The Supreme court flayed the Government over the process of fixing the Army chief’s age saying that it went against principles of natural justice. They have asked the centre to withdraw the order determining General VK Singh’s date of birth.
The general claims its a fight for honour, the Government says its for tenure. If that be the case, why not simply acknowledge the General’s word, restore his honour but decide that his tenure would end after four months as per records available with the Army’s adjutant General branch. For now, the matter is unlikely to be settled out of court or referred to the Armed Forces tribunal. So the guessing game continues.
GAS GRIND — The CAG pulled up Reliance Industries for violating its contract with Government. They were to return a fourth of the portion allotted to it for exploration in the KG basin gas fields and did’nt. Reliance now has agreed to but denied any breach of contract saying they had a say in the whether the areas were to be given up.
Accused also of rigging up costs, RIL attributes it to a five fold increase in crude prices since the start of the contract. For a fuel deprived country licensing for exploration is critical, politically sensitive and the process often questionable .
GRAFT GUILT — The common man is now legally empowered to fight those guilty of graft. The SC has ruled that any citizen could approach a competent court seeking prosecution of a corrupt public servant. The Government will be bound to decide on the question of awarding sanction within a time frame of four months failing which it shall be deemed awarded. To prevent misuse through delayed enquiries the competent authority only needs to ensure that material placed by complainant discloses commission of an offense.
What’s common to all these 2G’s is that they were of national importance and question policy and regulations or the lack of it. They all embarrass the Government, attack policy makers and seek to make the system more transparent, efficient and meritorious. The most significant outcome being the preference of auction over first come first serve basis (FCFS) while issuing licenses and dealing with national resources.
As they say you get nailed if you come under the hammer. FCFS is fundamentally flawed. Involving the element of chance or accident it is open to abuse. Shunting out FCFS in licensing in other corruption prone sectors like mining and energy would have legal complications but needs to be done. Merit must take precedence over chance and whim, accuracy over speed and transparency over power. Thus, the answer to 2G— Good Governance lies in 3G – as the auctioneer would say GOING ....GOING ...GONE
The week belonged to 2G. Not one but four of them. The spectrum scam stole the limelight, but equally significant were three other 2G’s — GUESSING GENERAL, GRAFT GUILT and GAS GRIND.
First the Spectrum scam. The Supreme court disconnected 122 telecom licenses. Decisions on bilateral dispute are bound to hit one and be a hit with the other. Decisions with a multilateral impact invariably end up with the most unsuspecting taking the hit. In this case it was the foreign investors and the cell phone customers.
While foreign investors would appreciate a business environment with a strong legal system keeping a check on mis governance they find themselves punished without being at fault. After all, they had in good faith invested into companies who had obtained genuine licenses issued by the Government. Going forward, how can they trust any Government document? And if not the Government who do they trust? Then, 70 million customers have to log out and log in elsewhere.
Existant unaffected operators (EUO)are at loggerheads to get them. Number portability would help. However, fewer operators amidst high demand and high license fees would inevitably mean higher charges. You could expect your phone bills to rise by a fourth in the near future. This would mean a bonus for the EUO’s — more customers, higher tarrifs and additional spectrum. For them higher incomes would make the verdict a great incoming call. Their stock prices have jumped.
On the flip side, stocks of banks who have lent around Rs 30,000 crore to affected companies were dumped. For them the verdict became a sell call. The biggest beneficiary as opposed to public popular perception has actually been the Government, more so the Congress party. Raja has been almost isolated at fault.
Chidambaram has been given a clean chit. The Government gets an income from confiscations amounting to almost Rs 14000 crore and 536 MHZ of 2G spectrum worth many times more — sale of which could help reduce the fiscal burden, climbing in the wake of falling tax revenues, high subsidies and no major disinvestment. This is a pre-Budget bonanza. For them the decision truly becomes a VAS – value added service. Net Result – customers migrate, Government celebrates , operators consolidate. For foreign investors the verdict comes like an SMS – Shock Message Served.
They have no doubt been wronged and can now only write. Write a plea to the Government or the court or simply write off the losses. They have the option of writing aggressive cheques in the upcoming re auction. No likely redressal for vendors, trade partners, employees or tower companies associated with the affected companies. For them the verdict means a hang up.
GUESSING GENERAL – The Supreme court flayed the Government over the process of fixing the Army chief’s age saying that it went against principles of natural justice. They have asked the centre to withdraw the order determining General VK Singh’s date of birth.
The general claims its a fight for honour, the Government says its for tenure. If that be the case, why not simply acknowledge the General’s word, restore his honour but decide that his tenure would end after four months as per records available with the Army’s adjutant General branch. For now, the matter is unlikely to be settled out of court or referred to the Armed Forces tribunal. So the guessing game continues.
GAS GRIND — The CAG pulled up Reliance Industries for violating its contract with Government. They were to return a fourth of the portion allotted to it for exploration in the KG basin gas fields and did’nt. Reliance now has agreed to but denied any breach of contract saying they had a say in the whether the areas were to be given up.
Accused also of rigging up costs, RIL attributes it to a five fold increase in crude prices since the start of the contract. For a fuel deprived country licensing for exploration is critical, politically sensitive and the process often questionable .
GRAFT GUILT — The common man is now legally empowered to fight those guilty of graft. The SC has ruled that any citizen could approach a competent court seeking prosecution of a corrupt public servant. The Government will be bound to decide on the question of awarding sanction within a time frame of four months failing which it shall be deemed awarded. To prevent misuse through delayed enquiries the competent authority only needs to ensure that material placed by complainant discloses commission of an offense.
What’s common to all these 2G’s is that they were of national importance and question policy and regulations or the lack of it. They all embarrass the Government, attack policy makers and seek to make the system more transparent, efficient and meritorious. The most significant outcome being the preference of auction over first come first serve basis (FCFS) while issuing licenses and dealing with national resources.
As they say you get nailed if you come under the hammer. FCFS is fundamentally flawed. Involving the element of chance or accident it is open to abuse. Shunting out FCFS in licensing in other corruption prone sectors like mining and energy would have legal complications but needs to be done. Merit must take precedence over chance and whim, accuracy over speed and transparency over power. Thus, the answer to 2G— Good Governance lies in 3G – as the auctioneer would say GOING ....GOING ...GONE
