The latest economic survey has indicated the government is keen on increasing privatisation, especially in the aviation sector and the debt-laden national carrier Air India. Banking and fertiliser are the other sectors where the survey has asked for decreasing the government holding.
Seeming to aim at Air India, the survey under the headline ‘Ambivalence about the private sector and private rights’ says, “The symptoms of this ambivalence is the difficulties for privatising of public enterprises, even for firms where the economists have made strong arguments that they belong in the private sector. Defying history, there is still the commitment to make the perennially unprofitable public sector airline world class.”
The survey goes on to add that it appears India has distinctly anti-market beliefs relative to others, even compared to countries with similar low initial GDP-per-capita levels.
Air India, which is believed to have a debt of around Rs 46,000 crore, is currently surviving on the cash support of Rs 30,000 crore from the government.
Referring to the mess the airline is in, Jitendra Bhargava, a former executive director, Air India and author of ‘The Descent of Air India’ tweeted, “Air India never relied on govt funding till decisions on aircraft purchase & merger were taken by political masters causing huge losses.”
The experts claim that before coming to power, the ruling regime in the Centre had indicated of its thinking to privatise the airline, but apparently, nothing moved in that direction till now.
Further talking about airport privatisation, the survey points towards the recent outsourcing of aerodrome management to the private parties but not airport redevelopment. The previous government based on several studies and surveys had earlier privatised a few major airports including Mumbai, Delhi, Hyderabad, Bengaluru. However, efforts to privatise other airports hit a roadblock as worker’s unions and others resisted the move, leaving the government to try out the option of just outsourcing the management.
The survey report also brought out the duality wherein the policy reform in the sector has been animated as much by an ‘interventionist’ as liberalising spirit, reflected for example in restrictions on pricing.
- The Survery says, Defying history, there is still the commitment to make the perennially unprofitable public sector airline world class
- It points towards the recent outsourcing of aerodrome management to the private parties