Running (down) a PSU

Civil Aviation Minister Praful Patel deserves marks for his honest confession that he wanted the government to sell Air India in 2004, but was asked to keep it going. It is obvious that this was a decision taken when the Left parties were an integral part of the UPA coalition, with no thought to whether a state-owned airline with India’s public sector culture could match the service levels of private carriers. The problem is what happened after he was asked to keep it going, because the airline has slipped from being sick to being on life-support. Unless key issues are addressed, Air India could run through the bail-out it is getting, in less than two years, given that it loses around Rs 200 crore a month.
The unfortunate truth is that every major decision that Mr Patel and his government have taken has hurt Air India — and no fingers can be pointed because all of these decisions were either taken collectively, according to Mr Patel, or at the instance of ministries other than his own. What is expected of a government if it is keen to keep state-owned enterprises going, for whatever reason, is that it follows a rational policy regime.
25/08/09 Business Standard

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Categories: NACIL Aug 2009