SC verdict on Presidential Reference

SC verdict comes as a big relief to the government,says FE's Sunil Jain.

The Supreme Court verdict on the Presidential Reference on whether the only way to allocate natural resources is through auctions comes as a big relief to the government. But the verdict does not allow the government to license/allocate natural resources in an arbitrary manner. The judgment says the government has to consider the common good and not just revenue maximisation.

In the case of a coal mine,for instance,this means the government should not look for a bid for Rs 20,000 crore for a coal mine. Instead it should allocate the mine to the person who offers to provide the cheapest electricity to consumers. This,by the way,is what the Ultra Mega Power Policy does even today.

If the government was auctioning a water franchise in Delhi,instead of looking for a bid based on money,the auction criterion could be the price at which water would be provided; or the number of hours that non-stop supplies of water will be made available.

What the judgment does is to give the government important elbow room. So if a school is to be built,the government does not necessarily have to auction the land. But it will still have to lay out objective criterion for selecting the school — a DPS over a Vasant Valley for instance.

Israel Prime Minister Benjamin Netanyahu addresses the 80th session of the United Nations General Assembly, Friday, Sept. 26, 2025. (AP Photo/Richard Drew)

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