Deccan Chronicle

Air India might be privatised

Deccan Chronicle| sanjay basak / sridhar kumaraswami

Published on: May 24, 2014 | Updated on: Invalid date

Centre finds running national carrier tough

Picture for representational purpose (Photo: DC archives)

Picture for representational purpose (Photo: DC archives)

New Delhi:  The privatisation of Air India could possibly be one of the major disinvestment moves of the Narendra Modi-led NDA government. The UPA government, in its second term, had earlier commenced a process of bailing out Air India through equity infusion of Rs 30,000 crore over a decade.

Well-placed Air India sources acknowledged that the airline could well be privatised in the near future since it was becoming increasingly "complex" for the government to be running an airline.
Sources said that with the "stabilisation" in Air India’s fortunes, given the huge financial backing of the UPA-2 government, the airline could eventually be privatised.

There is talk in saffron corridors that Mr Arun Shourie, who was heading the department of disinvestment (DoD) in the Vajpayee government, could play a key role in possible disinvestment moves by Mr Modi.

Air India had recorded a net loss of Rs 5,198 crore in the financial year 2012-13 while the financial year 2011-12 had seen an even greater net loss - Rs 7,559 crore. The airline began plummeting financially after the merger of the erstwhile international carrier Air-India and the domestic Indian Airlines in 2007.

In fact, even outgoing civil aviation minister Ajit Singh had said last year that Air India can be privatised if the "public, government and Parliament agree". While UPA-2, at the start of its tenure, had been firm that the national carrier would not be privatised, a rethink appeared to have begun in certain sections in the last year of the government’s tenure.

(Read: Ajit Singh wants Air India to be privatised)

However, the airline could soon be bracing for fresh employee unrest, especially over the issue of rationalisation of salaries of pilots. A large number of pilots could see their salaries slashed by significant margins, even though the Air India management has promised that salaries to pilots will strictly be as per market norms.

Meanwhile, "single-window clearance", "minimum maximum government" and "technocrats for key policy decisions" are likely to be the main three mantras of Mr Narendra Modi after he takes over as Prime Minister. Speculating on Mr Modi’s style of functioning, there is talk that he could add more muscle to the PMO as most key policy and other major decisions would require his green signal.

It is also learnt that Mr Modi could possibly clip the wings of the Planning Commission and seek outside advice if needed. He could also do away with the system of permanent members in the Planning Commission.

Mr Modi, who has already asked the secretaries to swing into action and suggest what went wrong in the previous government and chalk out possible steps to contain inflation, among other things, would also set a timetable for completion of given tasks.

There is also speculation of holding meetings of the National Development Council in the states instead of the chief ministers coming to Delhi to attend the meeting of the Planning Commission. There will be, of course, nothing like a "100-day progress report". Mr Modi had repeatedly made it clear that he would talk about the progress of the government only in 2019.

Mr Shourie, in an interview, had gone on the record saying that Mr Modi "will function in a quasi-presidential manner. India is anyway moving towards a system like that". All eyes, however, will be on Mr Modi’s moves on FDI issues. While Mr Modi is likely to avoid FDI in retail, it is probable that his government will encourage FDI in sectors where technology is needed, a senior BJP functionary said.

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