BJP leader Subramanian Swamy has called the Narendra Modi government’s plan to sell Air India “anti-national”, adding that “we cannot sell our family silver”. Congress leaders Kapil Sibal and Sandeep Dixit claimed that the government’s move shows India is on the “brink of bankruptcy”.
ThePrint asks: Air India sale: Congress & Subramanian Swamy right to call Modi govt bankrupt, anti-national?
Problem not with Modi government, but with the thinking prevalent within bureaucratic circles
National Co-Convener, Swadeshi Jagaran Manch
The problem is not with the Modi government. It is with the thinking that is prevalent within the bureaucratic circles. This is a concern that must be dealt with. As far as the sale is concerned, we aren’t against disinvestment.
The problem here is that of a strategic failure. The way this whole thing has been handled raises questions. The narrative ‘if it’s not sold, it will be closed down’ doesn’t seem very convincing. We understand the importance of national carriers, but the government must issue an initial public offering (IPO).
Air India has a huge bilateral which is invaluable. The losses are not because of Air India’s poor operations, but because of the political class and the corruption. I believe that the ownership of the enterprise doesn’t dictate the efficiency or inefficiency of it. It is always possible to turn around the business.
It’s not the government’s business to run a business. But at the same, one must not throw away their assets. There is an urgent need to bring out an IPO. Strategic failure can never be good.
Air India’s panic privatisation has risen due to Modi govt’s spectacular economic mismanagement
Rajya Sabha MP, Congress
Markets have already seen the Modi government’s attempt to hawk Air India and retreat in abject failure. Now its renewed desperation to sell Air India as quickly as possible is raising concerns among potential buyers about what the government is trying to hide and whether this is really a credible process.
This pathetic situation of panic privatisation has risen because of the Modi government’s spectacular economic mismanagement. It is not able to raise enough through taxes to generate the resources needed to revive the economy. India’s GDP growth continues to plummet into a “Modi slump.” Unable to meet disinvestment targets in a systematic manner, Prime Minister Modi is now trying to give away the nation’s silver even for small change.
This is a cause for grave concern. Are Air India and its assets being valued fairly by independent valuators? Are not the 7 verticals of Air India generating operating profits? Does this cash-strapped government have the capacity to absorb Air India’s Rs 56,000 crore debt? Is this a distress sale of national assets to cronies of the government? Such questions have already arisen in the case of other disinvestment announcements made with great fanfare.
An anxious India waits to see what will be left of India’s national assets after an incompetent Modi government conducts its fire sale to fix the big hole in the budget.
Modi govt’s decision to divest Air India not driven by choice but public finance compulsions
Visiting senior fellow, IDFC Institute
The privatisation saga is as old as the 1991 liberalisation and government announcements have flattered and flailed. The Niti Aayog put out a list of 34 PSEs in 2017 for strategic disinvestment. All that happened was public sector units bought public sector units and paid the government money to fill the deficit. A new list of 50 PSEs was released in July 2019, and BPCL and Air India was to be sold in the current fiscal, but that is yet to be realised.
The question of whether the government should be in business is not about ideology, but about efficiency. It is less about government ownership and more about political management of public wealth. The ills of political management are validated by data on public sector banks — private sector lender HDFC Bank has a higher market value than any public sector bank. In the last decade, an average of over 70 PSEs have reported losses — to the tune of around Rs 25,000 crore per year or nearly Rs 70 crore a day.
The mounting debt and losses of Air India are unsustainable. The decision is driven not by choice but by public finance compulsions. A series of bailouts and the state of the airline show it is best government exits the sector.
Modi govt trying to resolve Air India’s debt issue for which Congress is responsible
National spokesperson, BJP
I don’t think that the Congress is right in saying so. I don’t agree with the statement. Congress has to answer why a company in an industry which has seen good growth has been rendered in bad shape.
It was during the Congress’ time that Air India was nationalised and later on fleeced. From debt to complete mismanagement to corruption, Air India was witness to various problems. The biggest issue here is that of accumulated debt. The airline is not able to service debt because of over leveraging, though operationally it is doing fine and has potential to grow. Unnecessary purchases of aeroplanes for corruption and personal gratification only added to the debt.
The government is rightfully trying to resolve this issue. This is a good example of a good industry gone bad, owing to the previous government. As far as Subramanian Swamy’s comment is concerned, I don’t know why he has made this statement. having a PSU in the airline sector alone cannot be called nationalism.
Those opposing Air India disinvestment must ask if Modi govt has run businesses efficiently & profitably
Senior Fellow & Head of Research, Pahle India Foundation
The strategic sale of Air India is neither an indication of the government going bankrupt nor of it being against national interest. At best it is unfortunate. The problems for Air India started to surface with the merger of Indian Airlines and Air India. The downfall of this behemoth was furthered by constant political interference with its functioning.
The failing of any public sector enterprise (PSE) is not because of any single government; it is the result of years of mismanagement, moral hazard, and a great deal of being taken for granted. If it were true that Air India’s or any other failing PSE’s financials are indeed causing India to go bankrupt, it is the fault of all stakeholders, and not just the incumbent government.
It makes sense to divest shareholding in loss-making PSEs and not keep pumping in more money. The government must move away from doing business in sectors it is no longer required to be in, and moving out of these in a gradual and calibrated manner is good economics, not anti-national.
It would be truly wonderful if Air India were to be revived and not sold. But what good will reviving be if we don’t allow Air India to function independently. Those opposing the disinvestment of Air India must ask themselves if they truly believe that the government has demonstrated its ability to run businesses efficiently and profitably. The answer is evident.
Also read: 3 reasons why Modi govt is sure its second bid to sell Air India won’t fail
By Kairvy Grewal, journalist at ThePrint