Admitted that there has been a massive fraud perpetrated on the people of India by corrupt Politicians and Crooked businessmen, the point that the ordinary, small investor stands to lose if the licences are canceled is being lost sight of..
It is not the Directors or Chairmans of the Companies who are going to be affected most.
If the Government were to scrap a deal because the politicos have been involved in Corruption, what is the sanctity of a Contract signed by The Government of India, through its Ministries/Antrix?
Does this not erode the credibility of the Government and the Nation abroad?
It is akin to Nations violating Treaties( which is never done,excepting by Hitler) because of Change in system of Governance or change in parties in Power.
Better to punish the Honchos and leave the small investor protected.
To avoid these sorts of problems in future the proposal by P.Chidambaram,Union Minister(then Finance Minister,now Home Minister) , in addition to a fee, sharing of profits will be good idea.
One wonders why it has been shot down.
NEW DELHI: Five days after the department of telecommunications (DoT) awarded 120 licences in a controversial fashion, P Chidambaram, then Union finance minister, had written to Prime Minister Manmohan Singh suggesting that the new license holders should be asked to share profits with the government in case they sold their entitlements. In a note to the PM on January 15, 2008, Chidambaram had reiterated the finance ministry's suggestion to auction spectrum as the price would be based on scarcity value. He then went on to suggest this could be used as one-time payment for additional spectrum. "In addition, if a licensee sells his license (including the spectrum) to another person, it could be stipulated that the licensee should share with the government a part of the premium/profit gained by him through the sale," he had said in the four-page note. It would appear the suggestion did not find favour with the government. It is only now that the multi-crore 2G scam has blown up in the government's face, that the new telecom minister Kapil Sibal has spoken about charging companies for spectrum beyond a prescribed level. The Prime Minister on Wednesday said that although the finance ministry had initially asked for a higher price for spectrum, it subsequently went along with the telecom ministry's argument that to create a level-playing field between the new entrants and incumbents the existing system of allocating free spectrum with licence should be continued. "If the ministry of finance and ministry of telecom both agree...I did not feel I was in a position to insist that auctions must be insisted," he said. Chidambaram's letter would, however, indicate that he wanted auction. Not just that, he realised the possibility of licence winners making windfall gains by selling spectrum, and sought to minimise the arbitrage advantage by suggesting profit-sharing with the government in the event of any equity sale by these entities. The PM also said: "Now subsequent events have shown that companies sold their equity but I was told that they had not sold it to shareholders. They have sold it in a manner to dilute the equity of the promoters. Now, if they have to roll out they require money, and that money can be raised either by way of borrowings, or by way of diluting equity by getting in more people. Therefore, at that stage I did not think that I should intervene in that affair." Chidambaram's note had also touched upon the issue of additional spectrum available with telecom operators that CAG has said is valued at around Rs 37,000 crore. He said that it should be treated as a closed chapter: ``In such cases, the past may be treated as a closed chapter and the payments made in the past for additional spectrum (over and above the start up spectrum) may be treated as the charges for spectrum for that period. However, prospectively, such licensee should pay for the additional spectrum that he holds, over and above the start-up spectrum."
http://kutbook.com/news/india/7603-chidambaram-as-finance-minister-wrote-to-pm-for-auction-revenue-cut.html
Related:
The Cabinet Committee on Security (CCS) on Thursday terminated the ISRO-Devas Multimedia deal on S-band spectrum allocation over security reasons, sources said.
The CCS decided to cancel the deal between Devas and ISRO's commercial wing Antrix as per the recommendations of the Space Commission.
The Bharatiya Janata Dal (BJP) had on Tuesday demanded a statement from Prime Minister Manmohan Singh on the S-band allocation controversy, saying the subject falls under a department looked after by him.
In his interaction with TV editors on Wednesday, Singh had denied that the PMO continued talks with Devas even after the Space Commission had decided to scrap the deal.
ISRO had last week announced it has initiated the process to terminate the deal and claimed there had been no financial losses to the government.
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