The government’s show of flexibility on the demand for a Joint Parliamentary Committee (JPC) probe into the 2G spectrum allocation is a significant development ahead of the vital budget session. Fearing a repeat of the log jam that besieged the winter session of Parliament, the government softening its stand will counter the growing perception of political paralysis. As Union finance minister Pranab Mukherjee stated at the latest all-party meeting, no price is dearer than the running of Parliament. Disruptions during the presentation of the budget would have seen investor confidence plummet further.
A JPC probe is well and good, but there is also a pressing need to go beyond posturing and implement systemic reforms. At the heart of the problem is our approach towards allocation and management of precious resources. Ad hoc approaches have only benefited a handful of unscrupulous middlemen and shell companies. Discretionary powers of allotment enjoyed by those in positions of authority have bred a culture of crony capitalism. There is yet to be a proper audit of the total amount of spectrum available. Without such an evaluation any pricing policy is bound to be arbitrary, yielding itself to manipulations. The 2005 Isro deal with Bangalore-based multimedia company Devas is a case in point. Around 70 MHz of spectrum was to be allocated to the private firm for just Rs 1,000 crore when the government earned Rs 67,719 crore by auctioning a mere 15 MHz for 3G services. Whether land or spectrum, that state entities are sitting on sizeable chunks of limited resources that are much in demand incentivises murky dealings.