"Bad news first appears on Twitter these days. At 5.45 pm on Thursday, a tweet with a gloomy ring to it informed India that “no response has been received for the Expression of Interest floated for the strategic disinvestment of Air India.” Manifest in the debacle are humbling, instructive lessons, a reality check on the urgent need to deal with sick PSUs and haemorrhaging banks.
Lesson number one is that timing is critical—in politics and economics. In 2000, the Atal Bihari Vajpayee government had put both Indian Airlines and Air India on the block. There was a queue of bidders. The foreign partners of Indian bidders included Singapore Airlines, Lufthansa, British Airways, Qantas, Delta and Air France. The expected realization then: Rs 10,000 crore plus.
In 1996, when IA/AI were yet dominant players, a Committee of Experts on Indian Airlines led by Vijay Kelkar proposed a two-phase plan—funds and equity infusion, concessional pricing of ATF, ESOPs for employees and, finally, listing for public at large. The cost to the government was Rs 125 crore in equity and issue of subordinated debt worth Rs 150 crore. As in 2000, the 1996 proposal was scuttled by a politico-corporate nexus. Today the enterprise is a Rs 50,000 crore-plus millstone around the
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