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Cabinet Fixes Base Price For 3G Auction

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To bolster its finances and attract FDI, the Indian government took a slew of measures to raise nearly Rs 1.25 lakh crore through spectrum sale and Coal India Ltd divestment while soothing investors' nerves by deciding not to get into "fruitless litigations" like Vodafone case.
 
Besides, it cleared a proposal of HDFC Bank to raise Rs 10,000 crore from foreign investors and allowed drug maker Lupin to increase the cap of foreign institutional investor holding to 49 per cent in a move that would facilitate an inflow of Rs 6,099 crore.
 
Eyeing a record high spectrum sale of Rs one lakh crore, the government on Wednesday fixed the base price for 3G auction at Rs 3,705 crore per mega hertz - which itself can fetch over Rs 17,000 crore from this band.
 
Along with the spectrum in 2,100 MHz band, which is used to offer 3G services, the government will also offer the second generation or 2G mobile airwaves in three different bands in an auction scheduled for March 4.
 
While the auction of these 2G and 3G airwaves could garner Rs 82,395 crore at the base or minimum price, sources said the government expects the total proceeds to exceed Rs one lakh crore.
 
Wooing overseas investors, government today decided against challenging the Bombay High Court decision favouring Vodafone in the Rs 3,200 crore tax case and adopt a similar approach in transfer pricing litigations involving other MNCs like Shell.
 
The government wants to convey a clear and positive message to investors globally that its decisions would be "fair, transparent and within the four corners of law".
 
The decisions regarding government stance about Vodafone case, 3G spectrum base price, HDFC Bank fund-raising plan and Lupin proposal were taken by Committee on Economic Affairs and Union Cabinet headed by Prime Minister Narendra Modi.
 
In the country's biggest share sale ever, the government will sell up to 10 per cent stake in Coal India Ltd to raise about Rs 24,000 crore on Friday (January 30).
 
The government will sell 31.58 crore shares, or five per cent stake, in a public offer, with an option to sell another 5 per cent, Coal India said in a regulatory filing.
 
The disinvestment will help the government meet half of the Rs 43,425 crore revenue target from stake sale in public sector.
 
(PTI)
 


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