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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Spectrum auction issues: Comment on recently conducted spectrum auction.
Oct 08, 2016 Related to : GS Paper-3

Ans :

Introduction-

Recently government of India has conducted spectrum auction. The proceeds of the auction, which ended on recently after five days of bidding and it has raised about 32,000 crore rupees. The amount raised was well below the estimated figure of 56,000 crore i.e a 43% shortfall. Many blamed government for various reasons.

Main highlights of auction-

  • Only 41 per cent of the 2,353 MHz of spectrum offered could be sold.
  • Shortfall in auction is direct result of the government setting too high a reserve price for the 700, 800 and 900 MHz bands, which remained unsold except for 15 per cent of the offer in 800.
  • The reserve price set by government was several times the price of 1MHz of like spectrum per capita in rich countries.

Analysis-

  • Government has set unnecessary high reserve prices in currently conducted spectrum auctions. Hence it must learn from this auction process and set feasible rates.
  • Setting up of high base price is said based on indictment by the CAG’s report of 2G scam, which used the results of the 2010 auctions to estimate the fair value of spectrum.
  • Subsequent auctions conducted in 2012, 2013 and even 2015, in which companies had to perforce bid high to stay on in business, revealed pricing far lower than in 2010.
  • Similarly low pricing of spectrum has various economic benefits like faster growth and the higher tax revenues. Hence there is no justification for keeping the base price high.
  • A competitive bidding process would invent the optimal price, if the base price is not set too high to thwart bidding altogether. Unlike coal or other minerals, spectrum has no globally traded price.
  • Its value is location specific. Nor does spectrum get used up, it just gets used over and over again, creating value. Hence in upcoming auctions, spectrum must set low prices and helps to expand the numbers on the network and maximise the value which helps in higher tax revenue.

Conclusion-

Recently concluded spectrum bidding reflects the poor planning of government in spectrum auction process. Hence in upcoming auction it should learns from the mistakes and set a feasible prices. So that spectrum network also develops and generate revenue through other modes.


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