Friday, April 13, 2018

7 big air pockets put Modi's daring gamble to sell Air India in turbulence

Bloomberg: A plan to sell off India’s flagship airline is facing headwinds before it even gets started.

Narendra Modi’s boldest asset sale yet is the proposed divestment of Air India, the nation’s money-losing flag carrier, has run into rough weather after some of the potential bidders opted out upset with the government’s terms.

This setback, however, is the least of Modi’s problems a year before voters decide if he deserves a second term. Resistance to the sale is brewing within Modi’s own party, sundry opposition groups and unions, who could join forces and potentially scuttle the process. A similar attempt nearly two decades back failed due to the same reasons.

The challenge for Modi is to convince the nation’s political class, still rooted in a socialist past, why disposing of Air India is in the country’s best interests. Also, the sale will establish his credentials as an economic reformer steering the state away from running businesses.

“It’s a very tricky situation that may boomerang,” said Satish Mishra, a political analyst at the Observer Research Foundation in New Delhi. A sale would add to the opposition’s narrative that Modi is handing over state assets to the private sector, but Modi is a fighter who wouldn’t want to appear weak, he said.
13/04/18 Anurag Kotoky/Economic Times