oppn parties Privatizing Air India Might Succeed This Time

News Snippets

  • Delhi Additional district judge Nikhil Chopra says there is no legal right for people seeking to worship deity inside Qutab Minar, says it survived 800 years without worship so "let it survive like that"
  • Punjab chief minister Bhagwant Mann sacks state health minister Vijay Singla over corruption charges. Singla was later arrested by the ACB
  • Protestors burn the house of Andhra minister P Viswaroop and MLA Satish Kumar over renaming of Konaseema district as B R Amberdkar Konaseema
  • Gyanvapi: Varanasi district judge decides to first hear the 'maintainability' plea filed by mosque management
  • Delhivery and Venus Pipes shares list at premium of 10% and 8.7% respectively even when market sentiment was down
  • In a bid to cool edible oil prices, Centre allows duty-free imports of 20 lakh tonnes each of crude sunflower oil and crude palm oil per annum this year and next
  • Centre caps sugar exports to ensure availability of stocks in the domestic markets to cool prices
  • Stock markets get the jitters as RBI signals rate hike and government moves in to control inflation: Sensex tumbles by 236 points to 54052 and Nifty goes down by 89 points to 16125
  • IPL: Lucknow Super Giants to meet Royal Challengers Bangalore in the first Eliminator today. Winners to take on Rajasthan Royals for a place in the finals
  • IPL: Sensational David Miller blasts three sixes off the first three deliveries of the last over to help Gujarat Titans beat Rajasthan Royals by 7 wickets and enter their maiden IPL final in their debut year
  • While joining US-led IPEF, PM Modi says it will bring "peace and prosperity in the Indo-Pacific region"
  • Mamata Banerjee says Bengal government will not lower VAT as the excise cut by the Centre will already reduce state's revenue by Rs 641 cr
  • Mamata Banerjee says Central agencies must be made autonomous to save democracy
  • While commuting the death sentence of 2 men and 1 woman, the Supreme Court says convict's conduct before and after crime is vital for death penalty
  • Health minister Mansukh Mandaviya slams the Covid death report of WHO at the 75th session of World Health Assembly in Geneva
US President Joe Biden says India-US ties to be among "closest on earth" //////// China and Russia send bombers near Japan even as Quad leaders were holding meetings there /////// Gujarat Titans enter IPL finals in style, beat Rajasthan Royals by 7 wickets
oppn parties
Privatizing Air India Might Succeed This Time

By Ashwini Agarwal
First publised on 2020-12-16 07:03:02

After a number of false starts, including the last attempt to sell which resulted in not a single bidder coming forward, it seem that the government will finally get Air India off its back. The changed terms in the bidding process have attracted multiple EOIs, including one from the Tatas and another from some employees of the airline.

This is an excellent development. It should have happened a lot earlier. But the government had erred in the past by putting too many conditions for bidders and not wanting to let go of 100 percent ownership of the airline in the past. This time around, the airline along with its subsidiary Air India Express is up for 100 percent disinvestment. Added to this is 50 percent ownership of Air India SATS Airport Services. The government has now transferred Rs 29,464 crore from the huge debt run up by the airline to a special purpose vehicle and allowed the potential bidders to account for the rest while valuing the business.

Air India has been a drain on the exchequer. It ran up debts of Rs 58,256 crore till the end of FY 2019. With the pandemic having a severe impact on airlines this year, this figure must have ballooned further. Hence, any disinvestment process must be pragmatic enough to account for this and give breathing space to the bidders. Along with this, the government must also look into the matter of the employees and ensure they get a fair deal.

Whoever wins the bidding process and takes control of the airline will get huge ready-made infrastructure, licenses and permits. Hence, if the terms are good, the bidders will quote the price at which they will be comfortable to buy and run the airline. The government must be pragmatic in the next stages too and sell the airline with minimum fuss to get funds that can be productively used in other welfare schemes or infrastructure projects.