Breach of trust The SC spectrum judgment seriously undermines the sarkars credibility Jug Suraiya The Supreme Court

judgment in the 2G spectrum case,which cancelled the licences of 122 mobile service providers,has been hailed as a watershed ruling.The courts verdict in favour of the auctioning of natural resources instead of allocating such resources on an arbitrary first-come,first-served basis,as was done in the spectrum case will have far-reaching consequences.Laudable as the SC judgment is,the cancellation of licences of the 122 operators does have a downside.For the customer,the most likely repercussion is to be a hike in mobile tariffs,as the shakeout will reduce competition and prompt the remaining players to hike rates.For the cash-strapped government,the reallocation of the cancelled licences through auctioning could prove a Rs 1.70 lakh crore bonanza.But this short-term gain could prove to be a long-term loss,in terms of Indias already shaky reputation as a desirable business destination for foreign investors. The SCs order cancelling licences which had been awarded by the then government of the day calls into question the credibility and authority of sarkari decisionmaking.In effect,this means that an agreement between the government and another contracting party is not worth the paper its written on and can be overruled by a court of law.Two of the affected operators,whose stakeholders include Russia and Norway respectively,have reportedly raised this issue and are pursuing legal and diplomatic channels to protect their interests. The credibility of any government is based on the sanctity of contract,that any contract signed by the government will be legally binding.The spectrum ruling has not just dented but demolished the governments credibility in this regard.The message that has been sent out globally is that the Indian government not just UPAII,but the NDA government as well,during whose tenure the first-come,first-served system was adopted cant be trusted to honour the contracts it undertakes,which can literally be thrown out of court with retrospective effect. In the spectrum case,the serious undermining of the governments credibility comes at a particulary bad time for Indias economy,which because of external and internal factors has significantly slowed down from a projected 9% growth rate to a doubtful 7% for the current year.India urgently needs an infusion of foreign investment particularly in the all-important infrastructure sectors of roads and electricity where most of the bottlenecks are to revitalise its weakening economy.Which investment adviser would direct a client towards India,following the spectrum fiasco and the governments breach of trust that it involves Following the SC ruling,telecom minister Kapil Sibal is quoted as saying: Protection of (investor) interests is not the function of the government. Thats where the honourable minister is totally wrong: protecting the investors interest is or ought to be the most important function of any government,because it is only on the basis of such protection that it can claim any credibility. But then its not just the UPA-II but all Indian governments which for over 60 years

have successfully washed their hands of all responsibility of protecting the interests of that most faithful,optimistic and never-say-die of all investors.And that investor is the Indian voter who has been repeatedly short-changed through breach of trust by every inefficient and corrupt government voted into office.