Indian mainstream media’s trigger frolicking of Vijay Mallya extradition story every now and then is no secret. The latest “news” is that now Vijay Mallya’s extradition has been deferred to June 13. For the uninitiated, Vijay Mallya owes a whopping 9000 Cr. to different Indian banks and is living in a self-imposed exile in UK.
For what it’s worth – all the troubles of Kingfisher Airlines – a company founded by Vijay Mallya, are no match to financial instability, poor performance and overall crisis of domestic carrier and the prodigal child of socialist politicians – Air India.
Air India currently holds a market share of ~14% in domestic market whereas Indigo leads with ~40% in domestic market share. The uncompetitive behemoth has been injected with huge cash dole-outs by successive governments. For instance, UPA government, in 2012, injected Rs. 30,000 Cr. in desperate hope to save Air India from much-deserved liquidation. If that was not enough, the giant has been given consistent write-offs on bad loans by public sector banks (How else public sector banks amass such huge NPAs).
Despite the Government of India’s interference, the carrier refuses to mend its ways. Indian politicians treat Air India as their rightful bonded servant and behave to that effect. In 2015-16, Air India made a loss of Rs. 3587 Cr and despite past write-offs, Air India has a total outstanding debt of Rs. 46,000 Cr.
Pen pushing bureaucrats and clueless politicians refuse to see the reality that this Government (mis)adventure – like all others – has failed squarely. The window of course-correction has closed long ago. There is no room for more financial botch-ups. The best course of action will be to shut down Air India, sell / auction all of its assets to recover outstanding debt. There is no strategic or financial reasons for government to run such loss-making enterprises on tax-payer’s money. Given the extant unionization in Air India, it will be a politically hard decision to make – but economically sound and desperately needed nonetheless.
To single out Vijay Mallya while the petulant elephant in the room refuses to budge is a case of wilful blindness. It is for Indian republic to push the judgement and for lawmakers to cross the rubicon.