Wednesday, October 10, 2018

Will Modi’s Attempt to Turn Air India into a Professional Organisation Work?

Earlier this year, the government failed to privatise Air India when its offer to offload its 76% stake in it drew a blank. Thereafter, the Niti Aayog advised the government to first turn the national carrier around and then sell it to get a decent price.

A recent report in Business Standard, quoting unnamed government sources, carries a fairly detailed account of what the Centre wishes to do to turn Air India around.

The idea is to give it an autonomous board and empower it suitably, thus enabling it to put in place a professional management. The board already has the benefit of the advice of top industrialists who are independent directors.   

The aim will be to ensure that the suitably empowered autonomous board will get the company to stop making cash losses and therefore not need further government cash support beyond the current financial year. This is sorely needed because, over the five year period from 2012 to 2017, the carrier has posted a massive loss of Rs 27,000 crore and received capital infusion (cash to keep it going) totalling almost Rs 24,000 crore. 
10/10/18 Subir Roy/The Wire

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