The Cabinet of the Congress-led UPA government on Monday agreed to keep the reserve/base price of 2G telecom spectrum for the upcoming auction lower than the previous auction.

On November 22, Finance Minister P. Chidambaram-headed Empowered Group of Ministers (EGoM) on telecom had recommended a cut of 25.8 per cent in the reserve price for one MHz of pan-Indian spectrum in the 1,800-MHz band to Rs 1,764.79 crore. The Cabinet yesterday gave its nod to the recommendation.

For the previous auction, which took place in March this year, the government had set the reserve price for 1 MHz of pan-Indian 2G spectrum in the 1,800-MHz band at a whopping Rs 2,379 crore.

Announcing the decision, the government said in a statement, "The Cabinet approved the spectrum sale price as recommended by an EGoM. The decisions will result in further efficient utilisation of the scarce natural resource of spectrum."

The statement added that further efficient utilisation of spectrum would facilitate expansion of telecommunication services in the country.

The government has plans to auction 403 MHz of spectrum in the 1800-MHz band in the upcoming auction scheduled to take place in January. The auction is expected to generate Rs 30,000 crore to Rs 40,000 crore for the exchequer.