Loot ! Thy Name is Socialism
Oh! I am so happy; I wish to party; to dance, to celebrate!
You may ask who I am and why I am happy?
I am a poor common man who has dared to earn more than five lacs per annum and thereby penalized by the government by imposing a levy named as Income Tax. There are 1.46 crore other like me who pay a few thousand Rupees to a few crores as Tax but are proud that they are contributing something from their hard earned money towards welfare of their less privileged fellow citizen. They all have a reason to be happy. They will be saving more than Rs 20 crores of their precious resources every day. No longer will they be required to fund air travel of politicians, civil servants and Air India employees.
Privatisation of Air India was a difficult task. The decision was taken in 2003 to privatise it; successive government postponed fearing a backlash. It required courage, political will and negotiating skill, on the part of the government. When government decided to go ahead, there were no buyers due to huge debts, accumulated losses and burden of taking care of inefficient highly paid employees. It required emotional attachment on top of tremendous self confident on its own ability of Tata Group to accept the challenge.
JRD Tata formed Tata Aviation Services in 1932 with an investment of INR 2 lac and piloted its first flight than called Tata Air Mail. It was a cargo flight. In five years Tata Air Mail rose from a profit of INR 60000 to INR 6 lacs. When World War II broke out British India Government commandeered all aircraft, returning the same after the war. JRD renamed the airlines as Air India and went public as Joint Stocks Company. In October 1947,the Tata Group gave a proposal to the government of India to float the Air India International, with 49% equity by the government with an option to acquire additional 2%, 25% to be held with Tata Group rest by public. The proposal was immediately accepted.
The Air India was snatched unceremoniously from Tata Group. Under the Air Corporation Act, 1953, nine airlines including Air India was nationalised. Overnight the business of running Airlines was made illegal with fine of INR 1000 or imprisonment extending up to three months or both. The nine airlines merged into two, Air India and Indian Airlines. This is the beginning of ruin of Indian economy. The fear of acquisitions without notice killed the enterprising sprit of a newly borne nation. The job creators become villains. Uncertainty loomed large over other businesses adversely affecting investment in a nation rearing to go.
And, what did this nationalisation do for the poor public for whose benefit it was done. The pretentions and noble objectives only served the politicians and attached bureaucracy. He remained a meek bystander when politicians and bureaucrats enjoyed free air travel. The Air India was run for the employees, who get exorbitant salary and perquisites, including flying allowance for remaining grounded and International Air Tickets for family holiday. The poor taxpayers has to foot the bill of INR 70000 Crore; which is the accumulated losses of the Air India.
And, what it did to the business itself. The monopoly eliminated competition and bred inefficiency, bureaucratic intervention forced business acumen out of the door, collective bargaining of the employees made operations unsustainable. This is not a debate about public sector versus private sector. It is about power without accountability, business without any aim.
And, did it generate more employment? Think of scenario where 9 airlines working in stiff competitive environment for last 7 decades. It would have generated much more business, lower tariffs, more facilities to the customer thereby more air travel and more employment. This is not a mere hypothesis. The events of post 1991 liberalisation give concrete proof. The Raipur-Delhi air fare reduced from INR 10000 to INR 3000 within a few year although fuel rates and other inputs have increased.
The zeal of the Indian Government to work for the public welfare did not end here. In 1956, nationalization and merger of 154 Indian Insurers, 16 non Indian Insurers and 75 Provident Societies formed the LIC. Following it through nationalization of 14 Banks in 1969 and Coal Mines in 1971, 1972, 1973 and 1975. Not satisfied 6 more banks were nationalised in 1980.
Every sector that was nationalised languished. The general public as customer paid the price of inefficiency though higher tariffs and lower rate of return. Politicians, civil servants and middleman nexus developed, which was most visible in coal sector. For every ton of coal mined legally there was ten ton of coal mined illegally. All three shared the loot!
Air India was fortunate; JRD remained its chairperson till 1978. He took keen interest in its working and with his influence was able to slow the decline. He was dismissed in 1978 by PM Morarji Desai. In 2004, Government decided to merge the Indian Airlines with Air India. The merger was opposed by employees of both airlines. The merger took three years to complete. Since then Air India is not out of the red. To add insult to injury, orders of 68 planes were placed with Boeing at a cost of US$ 11 billion in 2006. Accumulated losses of Air India as on March ’21 were INR 70000 Crores and yearly loss for the year INR 7982 Crore.
The Air India was the No 1 in all 70 loss making Central PSU. Its sale is a major turning point in Indian economy. Let us hope that good sense will prevail and no judicial intervention is sought or allowed. Some of the judicial decisions-cancellation of the 2G spectrum licenses, coal block allotments, mining leases in Goa, have already had severe recessionary effect on Indian economy.
“The Government has no business to be in business.” The Government should restrict itself to its core function of external and internal security, communication, providing civil amenities and welfare of citizen. The wasting precious tax payers money on these PSU is betrayal of public trust. The Government should come out of all PSUs whether loss making or not. Providing Job to one citizen at the cost of another citizen is not just.
