Montek opposes any presidential reference on 2G case

Planning Commission Deputy Chairman Montek Singh Ahluwalia has totally opposed the move for making a presidential Reference on the 2G case and instead feels the Government should implement the Supreme Court order cancelling the spectrum licenses and completing the auction in good faith.

He has also suggested that a Group of Ministers can be constituted to consider complex issues like pricing of spectrum which could consider options put out by the Telecom Ministry and then make recommendations to the Government.

A fortnight ago, the Union Cabinet discussed the possibility of making a Presidential Reference to the Supreme Court on its 2G judgement especially on issues like auction of scarce natural resources and the First Come, First Serve method.

It deferred a decision on the ground that the Solicitor General can be called to give his views on the complex issues. The Government has, however, filed a review petition on the court judgement delivered in first week of February.

"....there is nothing to be gained by making a Presidential reference on the lines of the draft. If a reference has to be made, it must clearly state that the Government's position on key issues but I do not know if that would be appropriate," Ahluwalia said in a letter to Prime Minister Manmohan Singh recently.

He said if the Government itself was unclear about some aspects of policy like pricing of spectrum then it should first clarify its position and added that Telecom Commission comprising officials was not the right forum to use for evolving solutions to these complex and possibly controversial decisions.

On balance, Ahluwalia said the best course of action may be to implement the order of the court cancelling the licenses and complete the auction in good faith.

"Challenges regarding past licenses can be met in court with a clear indication of our position on the need for stability in policy. Decisions on pricing should be taken as executive decision by a Group of Ministers/Cabinet, if necessary," he said in the letter, copies of which were sent to Ministers of Finance, Home, Telecom and Law.

In his letter, he said that it is taken for granted that the Government has outlined in the 2G judgement accepts the decisions to cancel the licenses and to auction the spectrum.

On the question whether the government should move for a Presidential Reference and in what manner, Ahluwalia said the reason for it seems to be the belief that unless certain issues are clarified the government may be forced to reopen decisions on earlier licences that were not issued issued on basis of auction and the court's clarification may be needed on certain aspects even to proceed with the auction.

"I am not convinced that these concerns are valid. I also feel that raising these issues will create unnecessary problems," he said.

Expressing himself against posing a question whether earlier licenses given without auction were illegal or not, the Planning Commission Deputy Chairman said government does not need to interpret the judgement broadly as possibly negating all non-auctioned allocation.

This, he said, would go beyond telecommunication and would require cancellation of earlier mining leases also but which has not been included in the draft reference.

"The reference as currently drafted will only provoke headlines to the effect that the government is unclear about policy and this is bound to aggravate uncertainty about what the government will do to these licenses," he said.

On pricing of spectrum, Ahluwalia said the government needs to be clear whether it was choosing to introduce pricing because it increases the flow to the exchequer. In that case introducing pricing will seem reasonable.

However, while revenue flows are an important element of public interest they are not the only element. "We should keep in mind mind that particular action would have on investor confidence and therefore on the economy.

Unfortunately, the prevailing atmosphere of suspicion and the fear of criticism by the CAG, fed by hysterical press reporting, all too often leads to officials recommending the option least likely to attract criticism. That need not be the best for the country," he said.

Making a Presidential Reference also poses problems if there is a delay in responding on the part of the court as happened in the case of Punjab Reference in 2004, which is still pending.

"This will make it difficult for the government to act until the court has responded since any action taken will seem colourable, given the implicit admission of our own uncertainty about the legitimacy of such action," Ahluwalia said.