-Retd Colonel Bhaskar Sarkar |
The first attempt at privatization was made in 2000-2001 by the BJP but failed. In 2012, a study commissioned by the Corporate Affairs Ministry recommended that Air India should be partly privatized. In 2013, the then-Civil Aviation Minister, Mr. Ajit Singh supported the move. However, the opposition led by the BJP and the CPI(M) opposed the move.
On 27 May 2017, finance minister Mr. Arun Jaitley said Air India, with a mere 14 percent market share, had debt of Rs 50,000 crore. To run Air India Indian tax payers have invested Rs 50,000 crore which can be used for other purposes. So he has put a perfectly well run government enterprise for sale to make up for the present governments inefficient tax collection and fiscal management.
The decision to allow 76 percent foreign stake in it can lead to large scale retrenchment of its 29,000 employees. The fear of job losses has been one of the major reasons for various Air India unions to be opposed to the divestment plan. Even Centre of Indian Trade Unions (CITU) and RSS-affiliated Swadeshi Jagaran Manch have opposed the move.
IS AIR INDIA’S DEBT ABNORMAL?
Air India’s accumulated debt that stands at about Rs 50,000 crores. Let us examine the debt record of our leading private sector business houses.
India’s largest debtor is Mukesh Ambani’s Reliance Industries (RIL), has a total debt of Rs 1,87,079 crore. It also has the best record of timely paying its interest. So banks are happy to offer RIL loans.
The Tata Group’s consolidated debt was $10.7 billion or about Rs 70,000 crores on September 30, 2015. They are not amongst defaulters.
The Anil Ambani led Reliance Group has a debt of Rs 1,21,000 crore and is a major defaulter. Reliance Communications (RCom), its flagship firm, has a debt of Rs 40,000 crore. It has posted a loss every year since FY 14-15. The company is valued at Rs 13,440 crore, less than a third of its total debt. Reliance Infrastructure (RInfra) has Rs 25,000 crore of debt. Its market capitalisation is Rs 14,476 crore and is lower than its debt. Reliance Capital has debt of Rs 24,000 crore and in default. The group’s other firms like Reliance Infrastructure and Reliance Defence don’t earn enough to service the interest payment.
The Essar group has gross debt of Rs 1,01,461 crore and in default. Its 10 MTPA steel business that currently has a debt of Rs 40,000 crore is under the hammer.
The Adani Group’s debt stands at Rs 72,000 crore. Global lenders have backed out from funding the $10-billion coal mine development project in Australia.
The Jaypee group’s debt is over Rs 75,000 crore. The group has defaulted on payment obligations worth $350 million and is on the verge of going bankrupt.
The GMR group debt was at Rs 47,738 crore at the end of FY 2014-15. The Lanco group has debts of Rs 47,102 crore. The Videocon group has a net debt of Rs 39,600 crore and in default.
The GVK group has a debt of Rs 34,000 crore. Jindal Steel and Power Limited has debts of Rs 46,000 crore. It will be seen that our great private sector is making merry with bank funds. Most do not have assets to cover their debts.
So what is the problem if Air India has Rs 50,000 crore in debts? It is paying its creditors and cannot run away as Vijay Mallaya did or Nirav Modi and thousands of others have done. Money in the banks in India whether equity, deposits or debt belongs mostly to Indians. If the private sector can use this money with impunity for running their businesses and luxuries, why can’t the public sector companies do the same, what is the need for selling them?
Rs 11.5 lakh crore of Non Performing Assets (NPAs) are owed by the private sector companies to Indian banks. Rs 4.70 lakh crore worth of NPAs were due to loans extended to the industry. The debt of Air India is normal for a company of its size. Why should a public sector company be denied funds raised from the Indian public?
Vijay Mallaya robs banks of about Rs 7000 crore and makes merry in London. Diamond dealer Nirav Modi defrauds a bank of about Rs 12,000 crore and takes off to an unknown location ruining thousands of employees and hundreds of investors. Our government is not even blinking an eye. Every NPA of the public sector bank is tax payers’ money or money deposited or invested by the ordinary Indian. Air India cannot run away abroad with its 140 aircraft and thousands of crores of immovable assets. Why target Air India? Why can the government not nationalize all defaulting industries without payment and sell them off and recover the money?
The flip flop by the BJP regarding Air India privatization is mysterious. It wanted it in 2000-01 but opposed it in 2013. It has again initiated it. The government did not mind spending about Rs 72,000 crore on demonetization (Rs 36,000 crore on printing new notes and Rs 36,000 crore on reduced RBI dividend). Is the government out of money to spend and is desperately selling whatever it can? Or is the government planning to gift it to a consortium of crony capitalists like Adani Group of Gujarat in return for generous political funding for the 2019 general elections? Whatever the reason behind the move, Air India belongs to the people of India and no government has the right to gift it away to a crony capitalist who will borrow from the same banks to finance the purchase and not return the money.
I rest my case. Oh readers! Please decide whether Air India should be sold. If the answer is no, please do all you can to stop the sale.
I request Rahul Gandhi and all other opposition leaders to oppose the proposal in and outside the Parliament. If Indian railways can have budgetary support, if state transport can have budgetary support, if “gaushalas” for unproductive cows can have budgetary support, when BJP state governments can spend thousands of crores in preparing Unique Identity Cards for cows, bullocks and bulls, why should Air India not get budgetary support? Air India provides subsidized air travel to people of the North East, Andaman Nicobar and Lakshadweep. It is available to the Indian government for emergencies like evacuation of Indians from Kuwait and moving troops from one sector to another in time of war.
Air India is a national asset. It should be freed from political and bureaucratic interference and handed over to competent persons like Captain CD Gopinath. Then it will shine like the other “navaratnas.”