Right wing nationalists have recently claimed for swadeshi policies in Air India’s disinvestment.
The market realities prevailing in the public sector enterprises are contrary to these claims.
What is government’s decision on Air India?
Air India limited a government owned enterprise, has been a non-performing asset for well over a decade with an unsustainable debt of over Rs 520 billion.
This is partly on account of poor aircraft purchases and more due to deep rooted operational inefficiencies.
Air India has a huge loan amount but working capital loans and other liabilities account for more than half, which points to the deep-seated operational inefficiencies.
To address these issues Union government has proposed divesting 75% of Air India’s shares.
What is the stand of swadeshi advocates?
The right wing groups and advocates have always supported swadeshi in trade, politics and religion.
This ideology bloomed during the nineties for a brief period as a new swadeshi movement to counter the LPG measures.
The movement waned as the limitations with this ideology became manifest in an increasingly open economy.
Presently, few right wing advocates are trying to bring back the ideologies of swadeshi in government measures like divestments of shares in public owned enterprises.
What is the market reality in Air India’s disinvestment?
No Indian corporations are willing to purchase shares of Air India due to its heavy loan burden.
Even if they buy, none of the domestic players have capacity to turn around the airlines to a profitable entity.
There are unnecessary concerns over the national interest as divesting India’s flag carrier, could affect country’s security.
This stipulation has almost always crippled the growth of the public enterprises.
