Inadequate infrastructure and transportation has been India's biggest hurdles in the growth and development of its economy. The state monopoly, particularly in civil aviation and railways, had effectively trapped these sectors in a time warp. Civil aviation is an instance where the government-owned carriers, with high costs, non-availability of seats, recurrent delays and cancellations and the patronage of vested interests, made the experience of taking a flight a harrowing nightmare. However, in 1999, initiatives were taken by the government for the disinvestment of Indian Airlines and Air India, which was approved by the Cabinet, but this process was abandoned in midstream, when there was an in-principle consensus for 40 per cent divestment of which 26 per cent was to be held by a foreign airline/partner. Instead, there was this disastrous merger between the two entities and the unified Air India is yet to recover and is essentially operating on bailout packages and government largesse.
Private participation in airlines was permitted in the 1990s. The aviation sector was one of the early ones to open up. Unfortunately, the open-sky approach did not work out well. Of the initial players, only Jet has survived, with Sahara in its portfolio. New investors and operators made their entry, of whom a few, such as Paramount, have shut shop.
17/03/13 Business Standard
