Discussions are taking place everywhere regarding the fate of Air India. But once you find answer to a larger question, the answer for Air India comes up automatically.
That big question is should Governments be in business and if yes in what sorts of businesses.
Let us take two examples from India, one Indian Oil Corporation and the other National Mineral Development Corporeation. One is bleeding with losses and the other has net profit margins in excess of 50 per cent. IOC has red on the balance sheet but it is for a good cause of keeping transport of men and materials affordable and thus keeping inflation low. NMDC is returning super normal profits only a monopoly can earn. This surplus can be utilised for itself or through dividends it can go to Government.
But what about Air India? It is not at all an essential service as far as domestic travel is concerned. For travel abroad, skies are full of airplanes. Then why should the Government be the owner of a business which is losing crores every day and which serves no great purpose like oil marketing companies?
It is time this aspect is looked at. An even better business for the Government than that of the likes of NMDC, etc. is running a software business. All these firms are cash flow positive, needs very little capital expenditure and what is more most of the expenses accrue after real cash inflows.
That big question is should Governments be in business and if yes in what sorts of businesses.
Let us take two examples from India, one Indian Oil Corporation and the other National Mineral Development Corporeation. One is bleeding with losses and the other has net profit margins in excess of 50 per cent. IOC has red on the balance sheet but it is for a good cause of keeping transport of men and materials affordable and thus keeping inflation low. NMDC is returning super normal profits only a monopoly can earn. This surplus can be utilised for itself or through dividends it can go to Government.
But what about Air India? It is not at all an essential service as far as domestic travel is concerned. For travel abroad, skies are full of airplanes. Then why should the Government be the owner of a business which is losing crores every day and which serves no great purpose like oil marketing companies?
It is time this aspect is looked at. An even better business for the Government than that of the likes of NMDC, etc. is running a software business. All these firms are cash flow positive, needs very little capital expenditure and what is more most of the expenses accrue after real cash inflows.
