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Our politicians and their little playthings

The recent Air India crash and the flash strike that followed shortly afterwards have reawakened the issue of the privatisation of Air India. As the airline’s losses mount and its performance slips to new lows, more and more people are asking: why does the Indian taxpayer need to subsidise this mess? Vir Sanghvi writes.

columns Updated: May 30, 2010 01:25 IST
Vir Sanghvi
Vir Sanghvi
Hindustan Times

The recent Air India crash and the flash strike that followed shortly afterwards have reawakened the issue of the privatisation of Air India. As the airline’s losses mount and its performance slips to new lows, more and more people are asking: why does the Indian taxpayer need to subsidise this mess?

In a sense, last week’s strike may have the same effect as the infamous Indian Airlines pilots’ strike of 1993. This took place right after the demolition of the Babri Masjid when riots had spread all across India. Unmindful of the chaos in the country, the pilots, already the highest-paid public sector employees in the country, went on strike because of some work-related issue.

The effect of that strike was not just to cast the pilots as the nation’s number one villains, but also to increase the clamour for private sector involvement in the domestic aviation sector. From that point on, the private airlines, which had been run largely as charter operations till then, began to be perceived as the saviours of the Indian passenger and many people gave up completely on Indian Airlines.

Something like that is happening with Air India (which includes the old Indian Airlines — last week’s strike was an Indian Airlines affair) these days. As the bad news keeps flowing in, the majority of Indians are ready to give up on the airline. Let the damn thing die or close, is the general sentiment, we don’t really care.

I understand the sentiment but we must see it in perspective. Our attitude to the public sector in non-manufacturing areas has been: let there be lots of private sector competition but let’s not close down the public enterprises.

In the 1990s, when this doctrine was propounded, it seemed like a painless way of ensuring better service to consumers (through the private sector) without rendering people jobless (in the public sector).

But nearly two decades later, certain things are obvious. First of all, the public sector has proved unable to cope with private competition. Air India and Indian Airlines are now irrelevances whose share of passenger traffic drops with each passing year. The India Tourism Development Corporation (ITDC), or what remains of it, runs second-rate shops and hotels that simply cannot match up to private sector rivals. Doordarshan is a massive embarrassment, a hotbed of politics, intrigue and ineptitude, which is not even taken seriously by the rest of the broadcasting sector.

In every case, the massive waste of tax payer-owned resources is sought to be justified on the same two dubious grounds: national pride and social obligation.

Both arguments are non-starters. Show me an Indian who is proud of his country because of the excellence of Doordarshan and I will show you a moron. The social sector argument at least has a certain superficial validity — till you examine it closely.

To be fair, I doubt if anyone has claimed social obligation as an excuse for running the Ashoka Hotel to the ground. But this is certainly the argument offered for keeping Air India going. Air India flies to various uneconomic destinations, we are told. Which private airline would do this?

In fact, the uneconomic destinations tend mostly to be the constituencies of powerful politicians. The one exception is the North-East, where the airline has done a commendable job of providing connectivity. But it is possible to service the North-East more than adequately with a small airline that runs a fleet of seven aircraft and operates to a few key destinations. We certainly do not need hundreds of aircraft on order, offices all over the world, and thousands of overpaid employees to achieve this objective. If the North-East services are the sum total of Air India’s social objective, then it makes sense to close down this white elephant and to run a tiny airline instead.

So it is with Doordarshan. Here too, the argument of social obligation is employed. At one stage, this had a vague plausibility, largely because the government had legislated to prevent the private sector from entering terrestrial broadcasting. But as more and more of India is cabled up, the figures show that nobody watches Doordarshan if he has a choice.

The so-called social obligation consists entirely of government propaganda that has viewers reaching for their remotes. India would not lose anything if this absurd ‘social motivation’ ceased to exist.
What we did not realise way back in the 90s, when the doctrine of public versus private was propounded, was that the private sector would so completely out-perform the public sector. Far from providing an alternative and keeping the private sector on its toes, the public sector has collapsed as competition. Air India is rarely anybody’s airline of first choice. (I say ‘rarely’ because I am one of the exceptions, the last great Air India loyalist — and even I am fed up.)

No ITDC hotel can command the same rates as its private sector competitors. Doordarshan is easily out-performed by private channels in every cable and satellite market.

This permanent second-ratedness has had other disastrous consequences. None of these organisations even talk about competition any longer. They only talk of survival. The key question before Air India is not whether it can out-perform the private airlines. All we ask is: can it stay afloat? Nobody thinks Doordarshan will ever beat Zee, Colours or Star Plus. That’s not even an option. We never look for an ITDC hotel on lists of the world’s great hotels, the way we look for Taj, ITC, Oberoi or Leela properties.

As survival becomes the only issue, the good employees leave. The no-hopers who cannot find better jobs constitute the bulk of the work force. (The exception is Air India, which still has outstanding professionals.) No decent manager will touch these companies.

The government, which is unwilling to let go of its toys, installs bureaucrats to do the jobs of managers. Ministries start interfering in the functioning of the corporations. Politicians rape them. Unscrupulous chief executives line their pockets.

And through it all, you and I are the ones paying the bills. Every penny stolen from Air India goes from your pocket. Every rupee wasted on Doordarshan is a rupee that could have been spent on providing better facilities to Indian citizens.

It would be a shame if we let our outrage over the Air India strike settle into a general anger against Air India engineers. There are deeper issues here. Our entire attitude to those public sector operations that provide services that are replicated by the private sector needs to be re-examined. We need a national debate.

But of course, we won’t get one. Politicians love having their own airline. They enjoy having their own hotels. They delight in getting Doordarshan crews to cover their public meetings.
Finally, these corporations do not survive because of social obligations or national pride. They survive because politicians love their little playthings.

The views expressed by the author are personal

First Published: May 29, 2010 23:13 IST