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The Prime Minister’s Office has told the Finance Ministry that the Empowered Group of Ministers should take a decision on 2G reserve price before Mr Pranab Mukherjee exits.
The Finance Minister’s office had sought clarity on whether Mr Mukherjee can continue to head the Empowered Group of Ministers on telecom. The Officer on Special Duty (OSD) to the Finance Minister had sent a note to the Cabinet Secretary and the Principal Secretary to the Prime Minister seeking clarity on the appropriateness of the situation since Mr Mukherjee has been nominated for Presidential Elections.
In response, the PMO is understood to have taken a view that Mr Mukherjee can take a decision since he continues to be the Finance Minister at least till June 24. This comes even as the eGoM is scheduled to meet on Thursday to take a crucial decision on the reserve price for the upcoming 2G auctions. While the TRAI had suggested Rs 18,000 crore for 5 Mhz pan Indian spectrum, the telecom companies want this to be reduced by 80 per cent.
The Minister’s Group has invited the TRAI Chairman, Dr Rahul Khullar, to give a detailed analysis on the impact of the proposed reserve price on mobile tariffs, Government revenues and operators’ finance. An early decision on the reserve price is crucial for the Government to meet the August 31 deadline set by the Supreme Court for conducting the auctions.
Therefore, the Prime Minister’s Office is keen to get a decision on the reserve price before Mr Mukherjee exits the Finance Ministry next week, according to sources.
However, if the concerns of the OSD are taken on board then the eGoM is unlikely to take a decision on Thursday. This would delay the entire auction process because the Prime Minister will have to notify a new Chairman which may not happen until a new Finance Minister is appointed. The other option would be to route the decision making to the Cabinet.
For the telecom companies, this could be a blessing as they do not want the eGoM under Mr Mukherjee to take a decision because of his tough posture on maximising revenue for the Government.
In addition to the reserve price, the GoM is also supposed to decide on whether to change the existing roll out obligation from district level coverage to block level. It is also expected to decide on allowing deferred payment for auction winners, permitting operators to mortgage spectrum and the spectrum usage charge.
The Group has already decided to auction at least eight slots of 1.25 Mhz each in the 1800 Mhz band and another three slots in the 800 Mhz band.
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