Thursday, February 2, 2012

10 Questions about Supreme Court's cancellation of 122 2G telecom licences

In a historic judgement today, the Supreme Court has cancelled 122 2G telecom licences issued irregularly during the tenure of the former Telecom minister, A Raja (currently cooling his heels in a government hospitality center). The judgement was hailed by all concerned. After an initial dip, even the stock market celebrated by closing higher.

The judgement raises several questions. Here are 10 of them. Knowledgeable or enlightened readers are welcome to provide some answers.

1. By cancelling the licences, is the Supreme Court pointing the finger of blame towards the UPA government?

2. Isn't the business community equally to blame for trying to get something for nothing (well, not exactly nothing)? What happens to the not-exactly-nothing passed on to the badminton-playing government guest at Tihar jail?

3. Many of the 2G licences were acquired with no intention of providing any services, but merely to sell them off to others at huge profits - defrauding the government exchequer. Who will recover the immoral profits, and how?

4. A new licencing process will be formulated over the next 4 months and the licences will be reissued. Who will ensure that the new process will not turn out to be 'A Raja - Part 2'?

5. What happens to the licence fees already paid by the cancelled licence holders? Will those fees be forfeited?

6. What if some of the cancelled licence holders do not bid in the new process? Will the existing licence holders (whose licences have not been cancelled) be allocated extra spectrum?

7. Most of the licence holders borrowed money from the banks to launch their services. Will those loans become NPAs? Is that the reason why the Bank Nifty took a dive?

8. The Supreme Court judgement must have sent shivers through the spines of foreign investors in the telecom sector. Will FDI flows into India - badly needed to get our economic engine revving again - get affected by this judgement?

9. The charges against P Chidambaram brought by Subramaniam Swamy will be judged by a lower court later this week. If the judgement is adverse, can it bring down the UPA government? If yes, will the stock market crash?

10. Will the Supreme Court judgement open up a proverbial Pandora's box? Will all scams - whether in mining, CWG, Adarsh Housing, fodder - come under the Court's scanner? Will that be good or bad for the country?

Some of these questions may get answered over the next few days, as the government assesses the detailed judgement and formulates its plan of action. Till then, it will be good to hear what readers think.


Ganpat said...

Forgetting about stock markets for the time being,this UPA Govt which is sitting on its 9th year of non-governance and which has done colossal damage to the country's ethical,financial and social base HAS TO BE KICKED OUT IMMEDIATELY..MOST MORONIC SINGH's days are numbered.

Ram Kumar said...

It is definitely a win of good over evil. There will be turmoil as is expected when goodness has to ultimately prevail. I am not sure about the NPAs since if these companies have paid bribes to A. Raja, they obviously have to use their black money unless they have a way to hoodwink the Banks.

manish said...

The issue at stake is very large. The non-governance is forcing courts apply hard strictures, yet ALL political parties are sleeping.
How long will this continue?

It is commendable on part of India that still the corporate houses find it attractive to do business here...

chandra shekhar said...

sab 420. Case is 420.jail bhejo sabco

Subhankar said...

Thanks for your comments.