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Raja and praja

Punish the minister, not the market

Business Standard  |  New Delhi 

In the extant virtual lynch mob environment on corruption in high places, there is the risk that the media’s herd instinct may force the government to make new mistakes in seeking to correct old ones on the telecom policy. Former Union telecom minister A Raja has finally been arrested after the investigating agency was able to find adequate evidence of wrongdoing and personal aggrandisement on the minister’s part. While many fingers have been pointed at the possibility of such misconduct on Mr Raja’s part, there is now concrete evidence that has enabled the government to take necessary action. The entire country expects law enforcement agencies to continue to do their work without fear or favour. It is ironic that Mr Raja is the second Union minister from the same ministry to be arrested on charges of misconduct. There have been charges against other ministers who have handled this portfolio, one of whom is no more. Clearly, the telecom ministry has been a cash cow and politicians have happily dipped into it without much protest from business persons in the field. India is not unique in this regard. There is now adequate research from around the world, including developed economies, on the potential for skimming off unaccounted earnings from the telecom business and the problem of non-transparency in the spectrum allocation and grant of licences.

Recognising this, the government is now seeking to get its act together and clean the mess. While Mr Raja and a clutch of officials have been arrested, and while investigations against them will continue and the law, hopefully, will take its course, it is equally important that the government does not lurch from one extreme to another, or seek to make up for past sins by committing new ones. As our columnist Shyam Ponappa has again written this week (February 3) the government’s choices now include, (a) undertaking a genuine effort at developing comprehensive, integrated policies for reasonably-priced services, while carrying along all stakeholders; (b) a cosmetic effort, letting stakeholders vent, and then issuing arbitrary decrees that leave a mess, for example, too many operators with fragmented spectrum; or (c) attempting a political or populist fix, seeking to make the present government look good and the Opposition look bad, while bleeding all operators to avoid accusations of a sell-out. The first alternative, says Mr Ponappa, is in the public interest, while the second and third are not. He is right. The issues that need comprehensive transformation are spectrum and network sharing for service delivery at least cost. Standard international literature on spectrum allocation is increasingly coming to the view that spectrum allocation should not be viewed from a revenue perspective but consumer welfare and economic efficiency perspectives. While the minister and other officials must be punished for their misdemeanours, there is no reason why the consumer and the market must be punished.

First Published: Fri, February 04 2011. 00:16 IST