SCAMS ARE AVOIDABLE !

Early this week , Supreme Court held that , CAG ( Comptroller and Auditor General ) has the right - and obligation - to conduct an audit of telecoms

WHY  ?

>   Spectrum is a natural resource that belongs to the nation

>   Private telecom companies have a revenue-sharing agreement with the

      Central Government , for allowing them to " exploit " this natural

      - and national - resource

WHAT  ELSE  ?

>  This logic should also hold good for all private companies , who are

    allowed to exploit India's NATURAL / NATIONAL resources , to create

    materials / energy

    Here is a partial list :

    *  Fossil Fuels ( Oil / Gas / Coal )

    *  Minerals

    *  Sea-bed Nodules

    *  River Waters

    *  Wind

    *  Tides

    *  Sunlight

    *  Sea Water

    *  Jungles / Trees

    *  Earth's Magnetism

    *  Electromagnetic Waves

    *  Gravitational Force.....etc

HOW  ?

*  Tendering process must be public / transparent / equitable

*  Tender terms must be open for scrutiny/comment  by public

*  All resource-exploitation licenses must follow auction route

*  Eligibility Criteria must be pre-defined / publicized in advance

*  Licenses should be valid for pre-defined fixed period

*  Licenses cannot be renewed / extended

*  Concerned States must have a share in profit-sharing etc

*  Profit - sharing formula must be part of tenders

*  Any failure / delay on part of the Licensee Company to implement the

   Contract , will require return / surrender of the natural resource

   concerned , to the Central Government, with appropriate penalties

*  Natural Resource involved , cannot be hypothecated to banks / financial

    institutions to raise loans

*  Shares of the licensee companies

 cannot be traded in open market or

     pledged , without prior permission from Central Government

*   CAG Audit will be mandatory and reports must be published

*   Tendering / Auctioning / Licensing must not be handled by any Govt

     Department . A separate statutory authority should be created for this

*   To encourage early / fast implementations of Exploitation Licenses , there

     will be no Corporate Income Tax for the Licensee Companies

*   Each license will be given only to a SPV , created for this purpose

*   Cost-escalation leading to any Selling Price Escalations would be pre-

     defined

IN   HIND-SIGHT

*   Had we followed the above-mentioned process , perhaps , we could have

     avoided several scams of recent past and KG-D6 type  disputes

*   We could have also avoided ,

     #   Arbitrary price escalations

     #   Inflation

     #   Private profiteering

     #   Costly litigations

     #   Policy and Decision Paralysis

*   hemen  parekh  ( 21  April  2014  /  Mumbai  )