Sanjay Negi's thoughts on Current Affairs and Information Technology Directions.

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Saturday, April 14, 2012

Wasn't the Telecom minister A. Raja absolutely right in giving spectrum at very low prices? | LinkedIn Answers | LinkedIn

Wasn't the Telecom minister A. Raja absolutely right in giving spectrum at very low prices? | LinkedIn Answers | LinkedIn


Wasn't the Telecom minister A. Raja absolutely right in giving spectrum at very low prices?

It is obvious that the minister has done the Indian consumer a great service by granting spectrum at throwaway prices. The net result is that India has perhaps the lowest call rates in the world and the tele density has sky rocketted in the past few years.


The minister could have auctioned the spectrum and the corrupt government machinery would have got richer by $40 billion, but ultimately this money would have been collected from telecom subscribers through much higher rates.


It is well known that any money which gets transferred from private hands to government coffers deducts the GDP by a factor of up to 3. So an additional $40 billion if collected in one year to the government could have subtracted India's GDP by $120 billion in that year which is almost 10% of its GDP...


So minister Raja has done the country a huge favor by preventing government from commandeering such a huge tranche of funds. He might have taken bribes of 0,5 to 1 % amounting to a few hundred million dollars from the companies who were given the low cost spectrum, but that is chicken feed really....


There is no free lunch...if India wants to grow fast, it has to tolerate a little bending of the rules...we must not miss the wood for the trees....


And look at the guys who are squealing and protesting...the bureaucrats who were sidelined...

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