2G auction: High reserve price a mistake, says Montek Singh Ahluwalia

2G auction: High reserve price a mistake, says Montek Singh Ahluwalia

Mail Today Bureau   New Delhi     Last Updated: November 22, 2012  | 00:00 IST

Planning Commission deputy chairman Montek Singh Ahluwalia has said that it was a mistake to fix such a high reserve price for the 2G spectrum auction held last week as it had kept leading telecom companies away from the bidding.

Ahluwalia, who was part of an empowered group of ministers (EGoM) that set Rs 14,000 crore as the base price, said that the government needs to take a relook at the reserve price when it goes in for the next auction for the unsold spectrum during the current financial year.

As against the target of Rs 40,000 crore, the , which concluded last Wednesday, could only raise Rs 9,407 crore as several leading telecom companies did not participate in the bidding, which lasted only for two days due to lack of competition.

"I myself raised the issue that it was a mistake to pitch the reserve price at a level close to that," Ahluwalia told reporters on the sidelines of Indo-Japan symposium here on Wednesday. He added, "I think in hindsight it is clear that the reserve price was too high. But that doesn't matte. We are going to reauction and you will discover the price.''

Ahluwalia further added that the EGoM had lowered the reserve price from Rs 18,000 crore as suggested by the Telecom Regulatory Authority of India to Rs 14,000 crore. "I want to mention here that one or two newspapers had stated that by lowering the reserve price we were going to reduce the outcome. I had argued very strongly that a healthy auction process would discover the prices whether you fix it at one or two or seven hundred,'' he said.

On whether the government would reduce the spectrum prices for auction in Mumbai, Delhi, Rajasthan and Karnataka telecom circles, which went unsold in the last week's auction, Ahluwalia said that it is a matter to be decided by the EGoM.

Courtesy: Mail Today 

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