This bird must be killed

When I see a toaster malfunctioning and when I write software with bugs I know how complex even ordinary things are. So I always wondered how people really trust airlines with their life when it is such complex machine. Couple it with governments incomparable intelligence for messing up things and I made my mind never to fly by Indian Airlines.

Why a government should be in aviation business is something that my naive mind doesn’t understand. It has nothing to with national security, public good, governance etc. There are several other airlines which running in this country which offer a far better service.

Today’s news reads that this company has registered losses of Rs. 1.2 billion dollars. All this money came from my pocket and was wasted on over aged air hostesses, pilots who molest air hostesses, ministers flying and drunk passengers. My hard earned money was drained by the people I cant stand for 5 minutes.

There are several ironies that exist in our country. One of them is “a self proclaimed pro-poor (read pro-poverty) government running a service affordable only to 10% of it’s people”. This pro-poor government which apparently goes wrong on every economic aspect is headed by a “honest” man who owns a Phd. in economics.

When Arun Shourie went ahead with disinvestment he was termed as anti-poor, scandalous and what not. Both congress and media were up in arms against him. They argued that government is ought to be in the business of running hotels, bankrupt business and communication. Now that they are in power they are all for reforms.

They justify their moves by saying even NDA did the same thing. They too disinvested and we too are disinvesting.

There is a fundamental difference.

Government should not run businesses because it is simply not good at it. It not only screws up things it also holds back the potential of that particular industry. For example VSNL after being acquired by TATA has grown leaps and bounds. It has also significantly improve the quality of services thats available to industries. (Though they are still far from what is required).

When these businesses run in losses they inflict much more damage. They act as a sink of valuable public money. The $1.2b wasted by Air India could have been used to do so many wonderful things. It was a sufficient amount to fund the new 7 IITs. It was enough to build couple of more sea links.

The idea behind disinvestment is not just selling some of your assets to save your ass for a year or more but it should be strategic. It must be done is a way that it not only gets money to government but also changes the way in which it is being managed. This is possible only if you get rid of majority stake. This is precisely is not happening.

Disinvestment in AirIndia will be a gross mistake if the government does sell it’s majority stake and changes it’s management. Rather with such huge liabilities no will be ready to acquire this bird in any ways. I guess it must be killed. But then no will like to kill the bird that lays golden egg worth $1.2b in they backyard.

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