What’s the tearing hurry to dis-invest Air India?

Selling family silver is in vogue these days. Sell your ancestral land. Sell old gold jewellery as it does not fit into the fashion trends of today. The government, media and the consulting companies too have jumped the bandwagon and have been clamouring for selling off anything and everything that has value. This selling mania goes by the name – disinvestment. Editorials are being written as to why the central government needs to sell off Air India.
“The government’s job is to govern and not run airlines,” is smart line thrown at unsuspecting reader. Consulting companies have always been in favour of selling family silver as they have nothing to lose as they have already got their consulting fee for making a strong case for disinvestment. Government too seems favourably inclined towards off loading this so called “Albatross” around their neck.
People in general can be divided into two categories – the intellectual herd and the disinterested fence sitter. The former makes instant opinion based on who has yelled more loudly in media and hogged limelight. Whether there is any merit in their argument or not is not his or her concern. The fence sitters are normally silent lot who feel powerless and seethes within with apparently no voice.
However, two questions that beg answers from the powers that be — why family looms need to be sold? And to whom?
Air India is in deep financial red. We all know that but the question is why and how did it land in this mess in the first place? Why nothing was done to arrest the slide at the right moment? And why an action shouldn’t be initiated against the guilty?
If the news in today’s Times of India is any indication CBI (Central Bureau of Investigation) has opened an investigation into how the airlines, which was once one of the top airlines’ in the world, has met the fate it is suffering today. They are focussing on three questions – Why 111 planes were bought when there was need for only 28? Why the profitable routes were given to private airlines? And why domestic and international operations were merged?
I think this is the way the department, ministries and the government should go about in dealing with all the ailing PSUs (Public Sector Undertakings). Government should constitute a committee that should ask questions with all the secretaries and CMDs (chairman and managing directors) of PSUs.
Hindustan Machine Tools bosses should have been asked when there are 67 percent people engaged in agriculture and the government is pushing modern agriculture then why aren’t you being able to make good quality tractors and sell them? Why is it that with a market of 1.2 billion people you can’t sell watches and Titan can? Why is it that when India needs to build infrastructure which is double that of what it has made in the last 70 years in next 15 years then cement corporation of India is struggling? Why do ITDC hotels located at prime locations (Hotel Janpath in Connaught Place, Delhi and Centaur at Indira Gandhi Airport) have to run in loses.
Instead of fixing responsibility and taking the culprits to task the government of the day and its predecessors have taken easy path — to sell the stuff. It’s like throwing the baby with the bath water.
The venerable bureaucrats, technocrats and other consulting agencies as well as political leaders should at least be asked why did they fail? What plans were made to tackle the competition? How did they handle marketing and PR?
Accountability needs to be fixed on those who have failed to deliver. After all these entire edifices are built on tax payers money and you just can’t turn them into dust and walk away as if nothing has happened.
To add salt to injury then the very people who have destroyed a robust marquee organisation turn around, hire a consultant and make a case of selling them saying it’s a drain on government exchequer(Oh really!).
They should be the ones who should be taken to task. They should be fired or their pension benefits should be curtailed or some sort of punishment should be meted out.
Secondly, the people should also pressurise the government that these organisations were built from their money. They have been around for the last 50 or more years. They have created a wealth of experience, a brand name, huge and talented workforce as well as immense real estate around the country.
After putting in that kind of resources and time and building a brand it would be sold for a song because a handful of people who were tasked to run it failed due to their ineptitude and total disregard towards the opportunity and responsibility they were entrusted with.
We all know that bureaucrats and political bosses have for long used these PSUs as personal fiefdoms. But these fiefdoms can also be profitable while serving your interests. Take the case of Emirates Airlines. It’s run by the royal family of UAE and so it’s a government enterprise. But in less than 25 years of its operations it is the most successful airlines in the world which earned a profit of $2 billion in 2015-16. It made the royal family richer and their airlines a feather in their cap. Their international reputation has soared too.
Even in India with online shopping portals gaining ground among the new buyers the postal department has seen a resurrection as their unmatched reach and workforce is acting as a backbone to the portals’ delivery operations in rural and small town India. The department which was close to declared a dinosaur is now alive and kicking and may soon be contributing to the government exchequer as a profitable venture.
The government should abandon the idea of selling the family silver and instead tweak its approach. They should hire professional bosses from the market at market price or on a retainer basis (with attendant perks of house car and other things) and link their financial emoluments to performance linked bonus. The same should be done with the IAS officers who are appointed during their tenure.
Retired IAS officers shouldn’t be a natural choice in any case. They may be great administrators but they are not necessarily the best of managers. Even if they have done their MBA from IIM Ahemdabad (which these days many of them have) their training as administrator comes in the way of being a cutting edged marketing person who understands the quick changing world and the power of quick decision making, risk taking and constant communication.
Government or rather political bosses who fear losing control can create a safety net for themselves by insisting that the CSR spend would be only in government run programmes and they can also ask for a 5 to 10 percent quota for government officers and political bosses for hotel rooms, airline tickets and other products or services.
This much flexibility is available even in private sector. With their pie secure the government should then transfer the operations, goal setting and vision planning of the PSUs to world class professionals driven by market realities.
Government can remain the majority stakeholder and the company can still run like a professional enterprise, nimbly negotiating the twist and turns of the market and earn profit for the state. With little tweaking in their approach and enthusiastic support from an emerging economy these mature and powerful companies (PSUs) can script a formidable story of success and quality and can also create opportunity to absorb large workforce.