Wednesday, October 06, 2021

Government may be third time lucky to say ‘Tata’ to Air India

The much-delayed privatisation of Air India has suffered from several false take offs. Since the interim Budget of 1991-92, India has followed a policy of disinvestment with regards to Central Public Sector Undertakings (CPSUs). The term ‘privatisation’ was first used in the Disinvestment Policy (1999-2000) formulated by the Atal Bihari Vajpayee government. While disinvestment need not result in change in state ownership, privatisation implies government relinquishing its stakes completely. Over the last three decades, only 10 CPSEs have been privatised.

There is a list of failed attempts to privatise; and Air India is one of them. Twenty years ago during the Vajpayee government, when the first attempt to privatise the national carrier failed, Arun Shourie, the then minister of disinvestment, clarified in Parliament that stiff opposition and slowdown in the international airline businesses were the prime reasons for the deal to fall apart.

Interestingly, Air India’s privatisation seems to be inching towards finalisation at a time when the global aviation sector is in the throes of a crisis. If the current speculation that the Tatas might grab the deal comes true, Air India would revert to its original owners in a strange reversal of history. Even otherwise, if the deal goes through, it would have three important significances. First, it would mark the revival of privatisation in India. Second, this would be the Modi government’s first successful strategic disinvestment deal in the last seven years, when disinvestment has been merely confined to sale of some PSU shares to another PSU. Third, recommendation of the Disinvestment Commission (given in 1998) to privatise Air India would be finally implemented.

06/10/21 Sudipto Banerjee/First Post

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