Technological angle to 2G scam discrepancy

The 2G scam was labelled at INR 1.76 Lakh Crores. When GoI auctioned 2G spectrum again, it is fetched mere INr 9,600 Crores. Now pro-government forces are in “We told you so!” mode.

I am not a student of scam-ology. However, I have a reason to believe in the original estimate – it is called Obsolescence.

Technology gets obsolete at an exceptional rate.  Roughly, technology halves its value every year.

For example, your cell phone for which you paid INR 25,000 two years back is now worth INR 6,000.

A spectrum for 2G is not like land sites. A land site doesn’t have any competitor. 2G now has 3G and even 4G.

So, if in the end of 2012 the spectrum fetched INR 9,600 Crores, in 2008 it should have fetched

INR 9,600 Crores * 2 (for 2012) * 2 (for 2011) * 2 (for 2010) * 2 ( for 2009) * 2 (for 2008)

= INR 9,600 Crores * 32

= INR 307,200 Crores in INR terms of 2012.

Given the fact that INR (rupee) lost its value significantly over last 5 years, let us halve that value to INR 1.53 Lakh Crores.

That is a close match to original CAG estimate, isn’t it?


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