White Paper on Enabling Equity and Efficiency through Auctions in India

Auctions,

Economics,

Efficiency,

Equity,

The ongoing debate and battle in India over spectrum allocation has brought to light the need for a better way to resolve the issue of ensuring equity and efficiency in resource allocation. The distribution of scarce resources with alternate uses is an economic problem and auctions can provide a market solution to sourcing the most efficient producer/buyer. The interests of the consumers and economy are best served by auctions that incorporate the basic principles of encouraging entry and discouraging collusion. The objective of this white paper is to set forth a case for making auctions an integral part of the policy debate in the country and looks at all the obstacles that need to be overcome. Along with other case studies it also presents the spectrum allocation debate in India to illustrate how auctions can lead to the much needed convergence in the ICT sector. On the basis of case studies it also illustrates the potential shortfalls in auction design and explains how these can be overcome. The paper also presents a set of guidelines or effective implementation of auctions.