Telecom Minister Kapil Sibal on Friday emphasised that policy must remain the prerogative of the government and that an "environment of sensationalism" is to blame for the poor response by telecoms to the auction.
In February this year, the Supreme Court cancelled 122 licenses sold in 2008 through a process allegedly bent by corruption; the court ordered the government to auction mobile airwaves instead. Last year, in a politically incendiary report, the government's auditor CAG said that the country had lost upto 1.76 lakh crores because telecom licenses and spectrum were not auctioned in 2008.
"The telecom story is no longer a story we can share with the world. Sensationalism took over." Mr Sibal said. "You cannot extrapolate figures and sensationalize them and destroy the hen that laid the golden egg," he said.
Earlier this week, the government raised about 9,000 cores - one fourth of its target - by auctioning spectrum. Less than 60% of the airwaves on offer found takers because carriers found the auction too pricey - the reserve price was seven times higher than what companies paid in 2008. Four telecom zones, including the expensive Delhi and Mumbai circles, saw no demand.
Stressing that "policy is best left to government", Mr Sibal said that February's Supreme Court order, which cancelled 122 licenses sold in 2008 and asked for spectrum to be auctioned meant that the "government was limited in its policy prescriptions, had to move forward in a certain way. Which is why you saw what happened a few days ago."
His criticism of national auditor CAG was far more aggressive. "If you bandy about this figure...1.76 lakh crores...where is that? This is a lesson that all of us must learn: allow institutions charged with certain responsibilities to do those."
The BJP's Arun Jaitley accused the government of "celebrating the failure of sale of spectrum." The attack on the CAG, he said, proves "this government has lost its sense of fairness."
(With inputs from Reuters)