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Ashwini Phadnis | Updated on January 09, 2018

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The flip-flop over Air India’s future helps nobody

Recent comments by Minister for Roads, Transport and Shipping Nitin Gadkari that the Government should not divest Air India’s profitable subsidiaries is the most recent example of government flip-flop with regard to the issue. Gadkari is a member of the Cabinet committee looking into the divestment; therefore, his comments contradict what the Government has been considering: selling the subsidiaries and using the funds to wipe out some of the over ₹50,000-crore debt of the airline. His comments, considering his position, will surely carry weight.

A lot can also be read into where the minister made the statement — in Nagpur which is well-known as the headquarters of the RSS. In July the RSS-affiliated Bharatiya Mazdoor Sangh had called upon all the airline’s associations and unions to unitedly oppose the privatisation move. These developments (even after giving Gadkari the benefit of the doubt as he represents Nagpur in the Lok Sabha and so may have chosen to make his comments there), do not bode well for the divestment of the Maharaja which after the Government’s initial in-principle decision to divest, does not seem to be making headway.

All we know is that an Air India-specific Alternative Mechanism headed by the finance minister has been set up. This is expected to guide the process on strategic disinvestment and decide on the treatment of Air India’s unsustainable debt. It also entails planning the sale of assets to a shell company, demerger and strategic disinvestment of three profit-making subsidiaries, the quantum of disinvestment and the universe of bidders. However, Gadkari’s comments only send the wrong signals that the Government is on the path of divesting the airline in the shortest possible time. While all this is muddying the waters, AI staffers are expected to put their best foot forward — even as there is no clarity on whether their jobs will be secure and for how long.

Senior Deputy Editor

Published on August 24, 2017

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