Saturday, June 16, 2018

Why Modi govt must work quickly on a fresh roadmap for Air India sale

New Delhi: With the proposed disinvestment plan of Air India coming a cropper, it is now left to Prime Minister Narendra Modi to decide on what to do with the airline.

Government watchers say that they will not be surprised if the Modi Government confounds its critics and supporters alike, as it did in the case of permitting 100 per cent FDI in single brand retail in January and finds a fresh roadmap for Air India’s divestment.

There are many similarities between the two situations. At the time when the government decided to permit 100 per cent FDI in single brand retail, there was stiff opposition not only from the Opposition parties but also from within the BJP. At that time Prime Minister Modi bit the bullet and allowed the decision to go through.

When it comes to Air India and its divestment the situation is similar. Earlier this week, Bloomberg quoted Expenditure Secretary SC Garg as saying that the government can consider selling its entire stake in Air India. “A certain kind of strategy was offered that didn’t find many takers and therefore something different will have to be done,” Garg told Bloomberg adding, “There’s no fixed objective that the government should have 24 per cent. It can be re-examined.”

Then came another suggestion from unnamed sources in the government who said that listing the debt-ridden airline was also something that was being considered. While the identity of the government official has not been revealed he is said to be one who enjoys a status above Garg’s. The logic offered by this unnamed source was that listing the airline would help in garnering revenue as well as allow the government to retain control.
15/06/18 Ashwini Phadnis/Business Line
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