India: Time to Break Free
Air India has been in the news for most of this year for all the wrong reasons — a pilot strike, near-misses from accidents, payment defaults, mounting and yet another change at the helm. As the saga continues to unfold, the once dominant airline now struggles for survival with a market share of less than 15%. Air India loses 200 million rupees daily, is burdened with 430 billion rupees of debt and an accumulated loss of 180 billion rupees, according to Rajiv Pratap Rudy, member of Parliament and former Civil Aviation Minister, in a recent article.
There’s much debate on whether political interference, mismanagement or heightened competition led to the decline in the fortunes of this once-stellar airline. But the real question that begs an answer is: Why does the Indian government need to own or run an airline?
Or, for that matter, the Indian Railways, Nalco, Shipping Corporation and Hotel Corporation of India. Why should the government spend time and energy running commercial enterprises, particularly in sectors which have been liberalized and private sector participation is permitted?