The government appears to be doubtful about being able to carry out auction of the 3G spectrum in this financial year. The finance ministry has not included the proceeds from the proposed auction in this year's financial data.

The finance secretary Ashok Chawla indicated that the finance ministry has decided to not account the proceeds this financial year and the auction may happen whenever its timing is worked out.

"I can't say whether the actual auction will happen before 31 March," he said.

Union Finance minister, Pranab Mukherjee and the empowered group of ministers estimated the total proceeds to be nearly Rs 35,000 crore in this fiscal. The government has shifted its aim from trying to get the proceeds this fiscal to getting the maximum revenue from the auction whenever they happen.

The new 3G technology enables service providers to offer advanced services to their customers like high-speed internet, video-conferencing, interactive gaming, mobile TV and high-speed downloads on mobile phones.

The government indicates that it does not have definite timeframe for the auction as defence forces are yet to vacate the spectrum so it can be sold. The delay in the auction could be because of differences between the ministry of finance and the department of telecom in the areas of number of players and payment mechanism.

Leading telecom network operators such as Bharti Airtel, Reliance Communications and Vodafone Essar are expected to participate in the auction.

India has emerged as the fastest growing mobile phone market in the world with more than 15 million new mobile users each month. The competition in the sector in very high and the call rates are among the cheapest in the world.

New market entrants like Norway's Telenor and Russia's Sistema are further increasing competition in the segment where operators are already facing space crunch.

The government was earlier hoping to get the proceeds this fiscal so that it could contain the fiscal deficit within target of 6.8% of GDP however, the finance ministry is not complaining now as it has received over Rs 30,000 crore from disinvestment in public sector units. The direct tax collections in the country are also expected to rise significantly this year.

The government expects the overall tax collections target of Rs 6.28 lakh crore for the fiscal 2009-10 to me met with Direct tax collections offsetting deficit in the indirect taxes of around Rs 20,000 crore.