{"id":142517,"date":"2021-10-22T19:01:03","date_gmt":"2021-10-22T13:31:03","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=142517"},"modified":"2021-10-25T10:19:43","modified_gmt":"2021-10-25T04:49:43","slug":"will-privatisation-take-off-after-the-air-india-sale","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/will-privatisation-take-off-after-the-air-india-sale\/","title":{"rendered":"Will privatisation take off after the Air India sale?"},"content":{"rendered":"\n

Synopsis<\/strong>: Implications of the sale of Air India for the future of India\u2019s public sector.<\/p>\n

Introduction<\/strong><\/h5>\n

Recently, the Tata Group emerged as the winning bidder for Air India, the debt-laden national carrier. Further, in this year\u2019s Budget, the government unveiled a bold new disinvestment policy for even the strategic sectors.<\/p>\n

The government is also pursuing the sale of its entire stake in public sector firms such as BPCL, Shipping Corporation of India, IDBI Bank, two other public sector banks and one general insurance company this financial year alone.<\/p>\n

What would be the likely impact of Air India’s privatisation wrt divestment?<\/strong><\/h5>\n

– Positive signal<\/strong>: In the last 18 years, irrespective of the government in power, there\u2019s been share sales or transfer of shares from one pocket to the other but no genuine privatisation. Hence, this is certainly a long-awaited positive signal regarding the public sector, and more so for domestic and foreign investors.<\/p>\n

That the DIPAM (Department of Investment and Public Asset Management) has found a mechanism for the strategic sale of a loss-making unit like Air India is also a positive, because it\u2019s easy to sell something like BPCL that will attract buyers based on its enterprise value and profits.<\/p>\n

– Clarity of thought: <\/strong>The real value in this Air India sale is that there is clarity of thought.<\/strong> The government feels that whether it\u2019s a loss-making or a profit-making Central PSU (CPSU), it is willing to make a strategic exit.<\/p>\n

But, since the general elections are coming up in 2024, so the window of opportunity for either this kind of disinvestment or for monetisation is, at best, 18 to 20 months.<\/p>\n

What is the way forward?<\/strong><\/h5>\n

There is a possibility that as and when profitable PSUs are sold, there will be stronger ideological battles and questions. It\u2019s far more difficult to justify those kinds of sales; it would be easier to justify the loss-making sales.<\/p>\n

Government needs to clearly articulates its policy<\/strong> on what it wants to sell and what it wants to retain. This shall ensure a general consensus across the political spectrum that the public sector need not be a prominent player in the economy.<\/p>\n

While people may object for the sake of objecting, as long as the process is run in a very transparent manner<\/strong>, there will not be too much objection.<\/p>\n

Also, India should not conduct those kinds of sales which happened in certain countries where oligarchs came and just lapped up all the public sector assets and then became billionaires at the cost of the social good.<\/p>\n\n\n\n
Must Read<\/strong>: Privatisation of Air India – Explained, pointwise<\/span><\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source<\/strong>: This post is based on the article \u201cWill privatisation take off after the Air India sale?<\/strong>\u201d published in The Hindu<\/strong> on 22nd Oct 2021<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Synopsis: Implications of the sale of Air India for the future of India\u2019s public sector. Introduction Recently, the Tata Group emerged as the winning bidder for Air India, the debt-laden national carrier. Further, in this year\u2019s Budget, the government unveiled a bold new disinvestment policy for even the strategic sectors. The government is also pursuing… Continue reading Will privatisation take off after the Air India sale?<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10406,8671,216,9990,8896],"class_list":["post-142517","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-aviation-sector-air-india","tag-changes-in-industrial-policy","tag-gs-paper-3","tag-privatisation","tag-public-sector-undertakings","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704810821},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/142517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=142517"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/142517\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=142517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=142517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=142517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}