AIR INDIA -From Ground to Air
Every sensible taxpayer is relieved and feels happy about the privatisation of Air India. Air India has incurred a known cumulative loss of Rs 77,953 crore. Worse, it continues to make a loss of Rs.20 crore per day. Since Air India belongs to government, it will easily pull money from the pockets of hard-working honest taxpayers.
In 1953, Air India, along with eight other smaller airlines, was nationalised by Nehru as he thought it to be a step towards socialism. Gradually, Air India became a plaything for politicians and bureaucrats. Under non-professional management of bureaucrats, Air India sank deeper and deeper into losses at the cost of the exchequer.
It improved somewhat due to competition in 90s when private operators were allowed in civil aviation, but not for long. Consequently ,it was decided to disinvest Air India, but it took 20 years to translate it into reality.
Atal Bihari Vajpayee failed in his bid for this. In 2007 a strange decision was taken to merge Air India with Indian Airlines. Just before this, Air India, under the instructions of UPA government, with a turnover of only Rs.15,000 crore ordered new planes for Rs.50,000 crore. No wonder since that year, Air India is continuously in red.
Modi government took upon itself to disinvest this burden. However, his attempt failed in 2018, when not a single bid was received in tender. This was because the terms and conditions of the tender were framed bye non-understanding ministry by offering only 76% stake in Air India.
Fortunately this time, the government listened to better experts in Niti Aayog and a proper tender was floated. Tata owned Talace Private Limited came with a bid of Rs 18,000 crore. Tata is running two airlines Vistara and AirAsia in losses but he offered a liberal bid because of his emotional attachment to Air India.
Fortunately this was not the only bid and for this credit goes to Ajay Singh of SpiceJet who also quoted Rs 15,100 crore for this. The second bid made it possible to clinch the deal. Tata will own Air India before 31st March, 2022. Hopefully now Air India can make profit with the best slots available to it.
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One successful privatisation of an iconic entity like Air India will definitely boost the morale of Modi and future governments for disinvestment of overrated public sector.
I hope within this fiscal year the government of India will be able to disinvest BPCL, Shipping Corporation of India, Pawan Hans, BEML and Neelanchal Ispat Nigam.
I also wish Modi government to be successful in its effort to raise about Rs 90,000 crore by issuing IPO of 5 to 10% shares of LIC. India requires huge resources to build its present backward infrastructure.
I can only remind my readers of old adage that Government has no business to be in business. Air India may prove it to be true.
