Should the government privatise Air India?

GN Bureau | October 7, 2013



Civil aviation minister Ajit Singh has stirred a hornet’s nest by saying the government could consider privatising the national carrier, Air India, if there is a political consensus on the move. Though he backtracked soon enough in the face of criticism by opposition parties, including the BJP, CPI and CPI(M), many experts root for divestment in a move to cut the losses.

According to the Centre for Asia Pacific Aviation (CAPA), the national carrier has lost Rs 34,635 crore from 2007-13; its total debt amounts to Rs 46,500 crore and it has vendor dues of nearly Rs 5,500 crore. The argument on this corner is: it’s better for the nation to have the airline privatised because a) the taxpayer is footing the mammoth bill to keep AI on the sky and b) the government has lost the plot over the years and has proved that it has no business being in the flying business.

On the other hand, opposition parties criticised Ajit Singh’s statement and said the minister has no business making such “off-the-cuff remarks” without a discussion in parliament and accused him of seeking to sell public assets without putting in place a proper and transparent policy.

A day after saying the government might consider privatising AI, Ajit Singh told a news channel on Sunday: "This government has no intention to privatize Air India. After this package of Rs 32,000 crore, the government will not give any more money. Air India will have to fend for itself.”

So, should the government privatise AI and cut its losses?

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