Indian government conducted an auction for sale of spectrum. The auction earned about 11% of the expected revenue. So overall the auction was a failure.
The question is why did the auction fail?
The auction failed because government bureaucrats decided the price of the spectrum. Ideally, the market should decide the price of the spectrum.
The auction is conducted by bidding. So the base price can be kept very small. If the spectrum deserves a higher price, then during bidding the price will rise to the level that market is willing to pay.
The failure in spectrum auction shows the incompetency of Indian government. The respective minister and bureaucrats should resign.
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