Auction only for short-term gains, can be counter-productive: Centre

Differing with the Supreme Court's view that auction is the appropriate way to distribute "ready-made" natural resources like spectrum, the Centre today claimed that auction could be "counter-productive".

"It will only help short-term gains but in the long-run it may prove disastrous. Construction of roads, land allotment and there are several such examples where we can gain by way of auction but we don't do it since we have to look at larger public interest," Attorney General (AG) GE Vahanvati submitted before a constitution bench headed by Chief Justice SH Kapadia.

The government on Thursday initiated its arguments on the merits of the presidential reference, which has raised questions over the legality and practicality of the law laid down in the 2G judgment.

The bone of contention is the court's mandate that all natural resources should be allocated only through auction.

After hearing for five days the arguments over maintainability of the reference, the Bench had a day before decided to proceed with the main issues raised by the President.

Vahanvati also conceded that the government had "accepted" the cancellation of 122 licenses by the court in its judgement and that he was also not "canvassing" for the first-come-first-serve method in distributing natural resource like spectrum.

"I am not here canvassing for the first-come-first-serve method. However I need to draw your attention that several factors must be considered before taking an informed, reasonable and sustainable choice for the mode of distribution," he added. The court will hear the arguments next week.

Govt likely to miss SC's 2G spectrum auction deadline

The August 31 deadline set by the Supreme Court for the auction of telecom spectrum is likely to be missed by almost a month.

According to official sources, a change in government procurement requirements, introduced recently, will make the process of appointment of an independent auctioneer longer, upsetting the entire schedule for the 2G spectrum auction. The delay is mainly due to a notification issued by the government last year, which made it mandatory for companies to get a quality certification from the department of information technology in case of any e-procurement.

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