prasad1
Active member
This week, as a group of bureaucrats met to figure out what to do with India’s many loss making public sector companies, came news that national carrier Air India’s market share in August dipped to a two-year low. Air India, a loss making public sector unit, has been sucking out a significant quantum of public money as successive governments have failed to find a solution. There is one obvious remedy. Sell the company lock, stock and barrel. It is unconscionable for governments to be diverting scarce resources to revive Air India as it comes at a human cost.
Governments have to prioritise their spending. For instance, every rupee spent on trying to revive Air India means one rupee less for education or healthcare. Simply put, it means depriving some people of a fair chance to make a better life. In a competitive aviation market, there can be no economic justification to spend public money on maintaining a loss making airline, regardless of what has caused the loss. In an earlier era, there may have been a strong case of public investment in some activities such as airlines or steel. However, markets function extremely well in these areas today. The government’s priority should be to sell its assets in such areas and redeploy them in people who are economically vulnerable.
At present, there is a clear conflict of interest in the many hats the government dons. It crafts policy in aviation, plays a role in picking regulators, runs a commercial airline and picks up many perks in it. Those roles can never be in sync. Can DGCA, for example, really discipline Air India for its malpractices, reports about which frequently appear in media? That is another good reason for the government to sell Air India.
Times Of India | Blogs
I have written about it number of times, as a personal opinion.
Governments have to prioritise their spending. For instance, every rupee spent on trying to revive Air India means one rupee less for education or healthcare. Simply put, it means depriving some people of a fair chance to make a better life. In a competitive aviation market, there can be no economic justification to spend public money on maintaining a loss making airline, regardless of what has caused the loss. In an earlier era, there may have been a strong case of public investment in some activities such as airlines or steel. However, markets function extremely well in these areas today. The government’s priority should be to sell its assets in such areas and redeploy them in people who are economically vulnerable.
At present, there is a clear conflict of interest in the many hats the government dons. It crafts policy in aviation, plays a role in picking regulators, runs a commercial airline and picks up many perks in it. Those roles can never be in sync. Can DGCA, for example, really discipline Air India for its malpractices, reports about which frequently appear in media? That is another good reason for the government to sell Air India.
Times Of India | Blogs
I have written about it number of times, as a personal opinion.
