Kapil Denial Sibal

Economics is the art of evaluating the cost of the opportunity foregone. This is a delicate skill,as are all things that dabble in what-might-have-been. It is never that difficult,therefore,to over- or underestimate the size of the opportunity cost. In the case of the report of the Comptroller and Auditor General on the awarding of 2G licences,the figures should certainly be open to debate. They certainly come across as unnecessarily sensationalistic. Most analysts have agreed that the true figure lies well below the CAGs upper estimate. Yet whatever the truth may be,nobody is likely to believe that the governments refusal to use well-designed auctions didnt affect opportunity cost at all,as Telecom Minister Kapil Sibal would have us believe.

Regardless of the magnitude of the loss,the question goes beyond the nature of the policies that caused that loss. When governments and bureaucracies deal with quick technological progress there is always the possibility of simple ineptitude. Yet the very cause of the current crisis is the feeling the telecom ministry colluded in subverting its own,however inept,policies. That8217;s why A Raja was compelled to quit as telecom minister. That8217;s why Sibals assumption of the portfolio was a sign of hope. With his reformist credentials,he was supposed to ensure transparency in the investigation,and help the ministry,and governance,move on. That is why his Friday press conference is so disturbing.

The point is this: there is no way that this claim of zero loss will be read but as an attempt by the government to brazen its way through a severe political crisis. Going with an obvious,barefaced exaggeration might make a certain amount of sense to the more cynical in the UPA. But it is a misjudgement. The complexities of pricing the 2G loss do indeed mean that the average person cant confidently pick an exact figure,and that the government has chance to attack the CAGs estimate. But everyone has an intuitive recognition of firefighting. Theres enough despair about politics and scams about right now that the smart political thing for the government to do is to ensure it doesnt spread,by showing itself willing to submit the process to a thorough,transparent investigation. Brazenness wont help the political climate. Nor will it aid in ending the stalemate with the opposition. Indeed,it strikes an odd,arrogant note precisely when the government is backing the PAC as an investigatory mechanism and that committee specifically examines the CAG report. Its silly to score points on the weakest part of the CAG report when the Supreme Court is monitoring the situation,and the CBI is still in the process of filing a status report to the court.