Daily English Capsule
PDF 8th Oct. 2016
Spectrum fiasco: Overpricing fallout
The just-concluded telecom auctions are a spectacular (तमाशे का/ दशनीय) failure from the point
of view of raising revenue and selling what was offered.
The government will get this fiscal ( व तीय/ राज व) only Rs 32,000 crore of the Rs 56,000 crore
it had targeted from spectrum auctions (नीलामी), a 43 per cent shortfall (कमी होना).
Only 41 per cent of the 2,353 MHz of spectrum offered could be sold. The reason is not far to
seek. This self-inflicted ( वयं वृ त/ वयं के लए नु सान करना) blow to fiscal health is the direct
result of the government setting too high a reserve price for the 700, 800 and 900 MHz bands,
which remained unsold except for 15 per cent of the offer in 800. The reserve price was several
times the price of 1MHz of like spectrum per capita in rich countries.
The government must learn from this experience and not make the mistake of setting high
reserve prices in future spectrum auctions. A high base price is an unwarranted
(अनपे
त/अकारण) distortion ( व पण).
A reason often cited ( उ लेख करना/उ रण दे ना) to justify high base prices in auctions is possible
indictment (अ भयोग /अ यारोपण/ कलंक) the so-called 2G scam report by CAG Vinod Rai,
which used the results of the 2010 auctions to estimate (आकलन/अनु मान लगाना) the fair value
of spectrum.
This excuse does not wash. Subsequent (आगामी/उ तरवत ) auctions in 2012, 2013 and even
2015, in which companies had to perforce (मजबू रन/लाचार से) bid high to stay on in business,
revealed pricing far lower than in 2010.
Even without the conceptual correction required, of taking into account the economic benefits of
low-priced spectrum, including faster growth and the higher tax revenues that result, there is no
justification for keeping the base price high.
A competitive bidding process would discover the optimal price, if the base price is not set too
high to thwart ( वफल/ बगाड़ना/ नकाम बनाना) bidding altogether. Unlike coal or other minerals,
spectrum has no globally traded price.
Its value is location specific. Nor does spectrum get used up, it just gets used over and over
again, creating value. Spectrum use generates network effect: the more the number of people on
the network, the more the value of being on the network for everyone.
Keep spectrum prices low, focus on expanding the numbers on the network, maximize the value
created, and target a share of that value as tax revenue.
(Courtesy: The Economic Times)
1. Spectacular (ad) In a dramatic and eye-catching way. (तमाशे का/ दशनीय)
 Synonyms : Dramatic, Marked, Eye-Catching, Discernible
 Antonyms: Unspectacular, Insignificant
Example: The government policies regarding the auctions of Spectrum proved to be
spectacularly failed.
2. Fiscal (ad) Relating to government revenue, especially taxes ( व तीय/ राज व)
 Synonyms : Financial, Money Related, Commercial, Monetary
Example: The blunders of the government were open to a united attack, and Mr Chamberlain's
tariff-reform movement in 1903 provided a new rallying point in defense of the
existing fiscal system.
3. Shortfall (n) A deficit of something required or expected. (कमी होना)
 Synonyms: Deficiency, Dearth, Lack, Insufficiency
 Antonyms: Abundant, Excessive, Superfluous
Example: Unfortunately, as soon as he cleared the shortfall, the markets recovered dramatically.
4. Inflict (v) Cause (something unpleasant or painful) to be suffered by someone or something.
( वृ त/नु सान करना)
 Synonyms : Impose, Penalize, Scourge
 Antonyms: Benign
Example: They cannot destroy the strong, but they can inflict significant damage.
5. Unwarranted (ad) Not justified or authorized. (अनपे त/अकारण)
 Synonyms : Unforeseen, Without Reference To, In Expectant, Causeless
 Antonyms: Justifiable, Reasonable, Warranted
Example: It is also unwarranted to start with the expectation that everything in the world
should be explained by one principle, and it is a needless restriction of our means to expect unity
of method.
6. Distortion (n) The action of distorting or the state of being distorted. ( व पण)

Synonyms : Deformation, Disfigurement, Defacement, Mutilation
 Antonyms: Perfection, Uniformity
Example: The distortion of the countries represented would thus increase with the distance,
north and south, from this central parallel.
7. Cite (v) Referring as an evidence for or justification of an argument or statement. (उ लेख
करना/उ रण दे ना)
 Synonyms : Mention, Refer, Quote
 Antonyms: Conceal, Withhold, Deny
Example: This report cites another example which is perhaps more closely related to our
discussion.
8. Indictment (n) A formal charge or accusation of a serious crime. (अ भयोग /अ यारोपण/
कलंक)
 Synonyms : Imputation, Allegation, Arraignment,
 Antonyms: Acquittal, Exoneration
Example: Theological historians from that time forward have perpetuated the indictment that
Erasmus sided with neither party in the struggle for religious truth.
9. Estimate (v) Roughly calculate or judge the value, number, quantity, or extent of.
(आकलन/अनु मान लगाना)
 Synonyms: Presume, Expected calculation, Take The Gauge Of, Evaluation
 Antonyms: Ignorance, Fact
Example: “Make a fair estimate when we find ourselves situated close to one star”, said the
astronaut.
10. Subsequent (ad) Coming after something in time; following. (आगामी/उ तरवत )
 Synonyms : Consecutive, Successive, Following, Latter
 Antonyms: Preceding, Earlier, Former
Example: The point I'm trying to make is, we lack confirmation, especially in view of
subsequent events.
11. Perforce (adv) To be done necessarily or inevitability, by force of circumstances.
(मजबू रन/लाचार से)
 Synonyms : Compulsively, Helplessly, Involuntarily
 Antonyms: Voluntarily, Will-Fully
Example: sometimes the circumstances are made so politically constraint that companies have
to follow the policies in a perforce manner.
12. Thwart (v) Prevent (someone) from accomplishing something. ( वफल/ बगाड़ना/ नाकाम
बनाना)
 Synonyms : Ruin, Aggravate, Restrain
 Antonyms: Facilitate, Enlighten, Liberate
Example: A strong and energetic party endeavored to thwart the working of the new order, and
matters came to a climax on the death of William IV.
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