Revenue not the only aim of resource allocation, SC told (Lead)July 20th, 2012 - 12:39 am ICT by IANS
New Delhi, July 19 (IANS) The government Thursday told the Supreme Court that the “common good” as enshrined in the constitution and not just the consideration of financial gain was the touchstone of any policy for allocation of natural resources.
“Although the financial gain to the state is relevant, it is not the only guiding factor to appreciate whether a policy of distribution (allocation) serves the common good,” Attorney General G. Vahanvati told the apex court’s constitution bench of Chief Justice S.H. Kapadia, Justice D.K. Jain, Justice Jagdish Singh Khehar, Justice Dipak Misra and Justice Ranjan Gogoi.
“The auction will result in short term gain but in the long run it would hamper development,” Vahanvati told the constitution bench.
The broadbased concept of allocation of natural resources in Article 39(b) of Constitution eliminated limiting the alienation of natural resources by auction alone, the attorney general said.
“It (article) envisages all such methods available for distribution/allocation of natural resources which ultimately subserve the common good,” Vahanvati told the court.
Chief Justice Kapadia said that even in auction you could fix the criteria, lay down conditions and define the end use.
The attorney general was appearing before the constitution bench hearing the presidential reference seeking its advisory opinion whether auction was the only method of allocating the natural resources.
The reference is rooted in the 2G spectrum verdict in February wherein the apex court said that if scarce natural resources like spectrum were to be alienated by the state, then the only legal method was a transparent public auction.
As Vahanvati told the bench that in the case of minerals the government did not auction them but charged a royalty, Justice Khehar said, “Your rate of royalty was very low.”
Chief Justice Kapadia said that the court in the case of Bellary mines in Karnataka had directed the sale of iron ores at market rate.
Conceding that there would be certain areas where auction for the allocation of natural resources was the only way out, Vahanvati said that auction being “one method and one method alone will defeat the purpose”.
“There are millions of factors (that have) to be taken into consideration to arrive at informed and reasoned decision of the methodology of allocating natural resources,” the court was told.
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Tags: advisory opinion, alienation, apex, apex court, article 39, chief justice, constitution bench, dipak, financial gain, jagdish singh, jain, kapadia, misra, New Delhi, public auction, ranjan, resource allocation, scarce natural resources, term gain, touchstone