In this judgement, SC questions First Come First Served policy for spectrum ((which is a natural resource) and not the implementation of the policy. The contention is that since firms got equity at high valuations post spectrum licenses, there has been a loss to the exchequer.
I find this interesting since NOT all natural resources are auctioned away in our country - college licenses, mining licenses, land given to Infy, Telco etc to name a few. The judgement brings all these cases also fall into the consideration set. Did the Guj govt do wrong by giving away land w/o auction for the Tata Nano plant at below market rates? What about all the land Infy got from various govts?
And ofcourse, this opens up the scenario where the licenses awarded in 2001 and 2003 are also questionable since it used the same policy. Apparently the reason SC did not quash the earlier license allocation process (2001 and 2003) is that those firms are not part of the specific petition filed in the PIL. Seems to be a mere technicality which can be worked around if someone filed a PIL against those allocations.
In my perspective it is dicey for the court to comment upon the policy of no-auction because there are certain merits in going for a First Come First Served policy as against an auction. If the licenses were auctioned, the telecom tariffs in India wouldnt be among the lowest in the world and the current cell phone penetration would not have been achieved. While the govt got less money by not auctioning, it might not be the best way to give away licenses.
To put in a disclaimer, I am not defending the govt. - there certainly was corruption in this case but that is w.r.t the way the policy was implemented by changing the cut off dates arbitrarily (after the dates were passed), changing the priority list arbitrarily etc. This ofcourse needs to come out.
But in all this excitement about getting the judgement, we might be missing a key point of significance where SC is questioning the policy of no auction.
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