Will the government consider privatizing Air India?

India’s governance system is once more setting its eyes on the next Monday, the last day of February, the traditional day when the Union Budget is announced in India. For those outside the country, the event is important because not only does it share the P&L of the government from the past year, but it also shares the plans of how the government intends to earn and spend for the coming 12 months. Also, all sorts of gems are hidden as announcements in the budget.  A few years ago, the equity corpus that was created to be handed out to Air India to sustain it, was also announced in the Union Budget.

An interesting development has happened over the past month or so. The Government of India had created a group of Secretaries, including those the Foreign Secretary, Home Secretary, Economic Affairs Secretary & Law Secretary, to examine how to bring about good governance. For those who keep track, the current Prime Minister of India is very focused on folding up excess bulge which adds to useless bureaucracy which needs to be supported by the government. Minimum Government, Maximum Governance was one of his stated goals when he came to power a couple of years back.

As per a leading news daily, which picked up the notes on the meeting held where these officials presented their ideas to the government, they suggested:

the government start planning to get out of sectors such as airlines, hotels and travel agencies

While this was just speculation at that point of time, according to a press release issued by the government last weekend, the wheels will be set in motion shortly, as indicated by this press release (bolding mine):

In the times to come, the DoPT will also chalk out a possible plan for exit of Government sectors from hospitals, air services etc and a sunset clause will also be attached to every new scheme.

They haven’t committed to it fully, but they have gotten talking about it. Now lets see if the current government will come up with a full fledged plan to kick the elephant called Air India out of the room.

What do you think? Vote in this poll to share with us your views:

Will India privatize Air India in 2016?

  • No (65%, 33 Votes)
  • Yes (35%, 18 Votes)

Total Voters: 51

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I surely hope some initial light of day is shown to thoughts about privatizing Air India. It is high time!

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About Ajay Awtaney

Ajay is a financial services pro, working to bring order to the chaos of the financial industry on an everyday basis! Beyond that, he dons the hat of India's favourite frequent traveller, trying to help people elevate their travel experience via tips and tricks they never knew before, or introduce them to the world of miles and points. Armed with an MBA from MDI Gurgaon and graduate degree in computer science from the University of Delhi, Ajay brings a systematic and objective approach on the table for his audience in dissecting travel and loyalty programs in India and around the world, and how to benefit from them. Ajay has been quoted in various reputed traditional and online media including The Hindustan Times, Inside Flyer, Bloomberg, DNA India, Conde Nast Traveller, The Telegraph, Mumbai Mirror, Mint, MoneyLife and The USA Today.

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Comments

  1. I wish they privatize Air India but there are couple of points to keep in mind:

    1) Far more pressing issues than AI right now in the country which need urgent attention. Privatization talks would start another scrap which the govt can do without for now

    2) Even if the intent is there, and process is started – Are there any real contenders to buy or invest in Air India?

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