Turbulent times

“Air India is sick and I hope it doesn’t reach ICU” was the honest announcement made by the Minister of Civil aviation Mr. Ajit Singh while combating the fresh threats from the Air India Pilots. His candid admission of the problem faced by the National Carrier did not take any body by surprise. In fact it is common knowledge that the once smiling maharaja is not only sick but on the verge of death. En mass the pilots have actually reported ‘sick’ to halt the operations of the airlines is double irony. This comes a t a time when the entire nation was waiting for the sick AI to take off on a bailout package of Rs.30, 000 Crore and hoped that perhaps this time round the package may cure the airlines of its cancer. But it seems that this cancer is not curable and the Government & its inefficient ‘Babus’ are largely responsible for this malady. The overstaffed jumbo organization is in a complete mess after the merger of the Air India and Indian Airlines. Before its merger in 2007, both were doing just fine and earning profits. The cause of the strike is also rooted in the concern of the senior Pilots of the Air India against the training being given to the erstwhile Indian Airlines Pilots to fly the prestigious 787 ‘Dreamliners’ due to be inducted in the fleet. It is clear and admitted by the Honorable minister himself that all did not go well with the merger. All mergers & acquisition take place after much research and a clear plan to accommodate the smaller company & its executive in the mainstream. The government has miserably failed in providing professional leadership and management strategies to run the airline after the said merger. The sarkari  Babus simply did not do the essential pre-merger exercise and ended up with surplus staff and heart burn among the Indian Airlines Pilots.  The airline has a massive Rs 40,000 crore debt enough to fund and run at least 80 airlines. It has around 475 employees per aircraft as against 70 in Indigo & others. The humongous staff, enormous debts, incompetent management and lack of political will to run it on commercially viable routes, have all contributes greatly in grounding the AI. No wonder the Minister himself admitted that the Government should not be in the business of running an airline which is essentially a service industry.

The Government should learn its lessons from the British Airways & Lufthansa which were privatized some 20 yrs back and are now a much recognizable brand in the aviations sector. It should invite experts like Gopinath, the founder of air Deccan, who have proved their mettle in this sector and start the process of disinvestment to revive the airlines through a credible & strategic partner. On the other hand the highly-paid pilots should sit across the government and solve their problems through dialogues rather than holding the airlines and its passengers to ransom. The government should immediately implement the recommendations of the Justice Dharmadhikari committee report which has suggested ways & means to tackle the problems of the merger of the two giants, and integrate the problems of the human resource, training etc in AI. The problems do not exist only in AI, the Indian aviation sector itself is facing turbulent times, with Kingfisher also running up huge losses and struggling to turn around their operations. The Government must create a vibrant aviation sector and devise long-term plan and vision for all players. It should formulate policies and incentives to increase the percentage of the domestic passengers to competitive international levels and lift this ailing sector from its comatose state. If a surgery is required then it should be performed immediately to save the  smiling Maharaja from death.

Economic Hiccups

Popular perception over the slow pace of reforms got strengthened by our outlook being lowered from stable to negative by Standard & Poor. Slow pace of economic reforms and the numerous hurdles in the way of clearing several crucial legislative Bills has damaged our prospects of growth. An avalanche of criticism followed with every economist blaming it on policy paralysis.uge negativity has settled over the promised 7% growth in future. The lowered outlook jeopardises India's long-term rating of BBB-, which is the lowest investment grade rating.  Kiran Majumdar Shaw’s tweet- “Unfortunately FM's cajoling statement "No need to worry about S&P's downgrade" has no credibility to back it”- reflects the falling hopes of the business community.  S&P ratings for India are the lowest for any of the BRICS nations. From an august company of BRIC nations to the company of countries like Tunisia whose economy is in tatters after last year's revolution is a shame for the UPA government.  There is also the speculation of India being replaced by Indonesia in BRICS. One would believe that perhaps the Finance Ministry’s chief economic adviser Kaushik Basu saw this coming. Just last week he gave out a warning that growth will slow down further and inflation will be back if “political and economic alignments” are not in place. If these alignments work, he said, India will get back to its earlier levels of buoyant growth.

But regional satraps like Mamata Bannerji, are determined to put a spoke in the wheels of economic growth over one pretence or the other. After derailing the Railway Budget presented by the fellow Dinesh trivedi and getting a roll back in passenger fair of lower class, opposing the FDI in retail, the fiery lady is all set to oppose the proposed diesel price rise in the coming days, despite of Government’s agreement in principle to de regulate it. The opposition & Non UPA regional heads are behaving like a pack of unruly teenage kids, who are determined to shoot any proposal put forward by the center without measuring its merits in the national interest. They are more worried about their regional packages and portfolio promises even if it clashes with the larger benefit of the Nation. Unfortunately the very same congress which brought the growth to India had its hand tied by the communists in UPA1 and by its own bullish allies & corrupt partners in UPA2. It has failed in economic management and seems to be slipping even in allies’ management.

Reform is too serious an issue to be turned into a political slugfest. Instead of pointing fingers, the Centre and the opposition need to join hands at all levels to neutralise the threat of S&P’s negative outlook becoming a permanent fixture. Coming from the most conservative of the rating agencies, it’s a wakeup call for the governments to do something meaningful. The long wait for implementing reforms in retail, Insurance, and raising the fuel prices has resulted in the mobilisation of powerful opposing forces against the logic of reforms by itself.  Reforms in a democracy like ours can continue unrestricted only if the regional power heads, political beneficiaries and stakeholders are on the same page. Manmohan Singh’s administration is facing one of the most challenging periods of its second innings. Stung by corruption scandals and failed in statecraft, it is now a humungous task for him to deliver the promised economic growth and improve perceptions. It is not that the solution to the problems is not known. The point is that we just need to implement these solutions now. As the saying goes that "It is not the deficiency of knowledge but the efficiency of execution that separates achievers from the rest."