The "historic" judgement yesterday by the Supreme Court to cancel the 2G licenses issued in 2008 is bound to have many implications. Saying that first-come-first-served logic was used to assign licenses arbitrarily to market players is a subversion of policy, the Supreme Court has opined that allocation of natural resources must be through a fair and transparent method, such as auctions.
This pretty much means that any allocation method other than auctions can be deemed illegal in future. This is based on the assumption that if auctions are not used, foul play is likely. While in this case, it is fairly obvious that there was some foul play behind the scenes at the time of license distribution and hence the FCFS process of allocation was followed, this might not always be the case.
There surely will be instances in future where auctions are not the best method for distribution. Since the resources once distributed to players and then re-distributed to the general public, higher costs paid originally will inevitably be passed on to the customers. So, if there is a highly competitive bidding process with highest-bidder-wins-all logic, the end consumer is the one likely to suffer the most. The allocation decisions will have to be taken not just based on the bidding amount, but also based on other factors like redistribution ability, past experience, speed to market, existing distribution network and other factors applicable to each resource.
Coming back to the 2G scam, the guilt ought to be proved based on the reasons behind why A.Raja (and others) acted the way they did. There definitely is a reason why he went with the policy decisions he made - the last minute deadline changes, the arbitrary allocation process and the choice of players. This reason, yes you guessed it right, is related to money. This money trail is what should have been used to prove the guilt of those involved. The only money trail exposed so far is the 200Cr loan given by Swan Telecom to Kalaignar TV. This loan is hardly evidence for being a bribe, because of two reasons - the money came on the official books not in a Swiss bank account and that the loan was returned within quite a short period. Both these reasons make this look more like a loan than a bribe. Because of this, it is difficult to conclude that A.Raja made any money from the 2G scam (though many people think he made Rs.1.76 Lakh Crores) and hence convict him of bribery/corruption.
Either the CBI has been very inept at finding the real money trail or Raja and team have been very very good at hiding the money trail. With the absence of a money trail, the courts have had to find different methods of convicting the obviously-guilty. And this is what we are seeing - the courts commenting on policy-making decisions and having opinions about the suitability of auctions.
The necessity to pronouce Raja and gang guilty has resulted in the Supreme Court opining on matters it should stay out of. We will realize the impact of this mistake when a future such case comes up and this SC ruling is pulled up.