Over the years, several public sector companies have shut down either because of their inefficiencies or because they were unable to compete with the private sector in the marketplace. It led to the loss of thousands of jobs, sending hordes of families to the brink of poverty.
Rescuing the airline
The governments did nothing to revive them. Today, the same government is rewriting the rule book to rescue Kingfisher Airlines, a private enterprise, which went belly-up long ago and whose market share is a mere 3.2 per cent. The government rejigged its rules to accommodate an inefficiently run airline.
It even went ahead and offered amnesty to the promoters after they had defaulted on depositing money collected as tax from employees with the tax department. If one of its own enterprises had committed such a fraud, it would have sent its head to the jail first and then asked questions.
Was all this done because the government felt that the UB Group was doing a favour by running an airline? Prime Minister Manmohan Singh, who everyone believes has more pressing matters to address, recently came out in support of the airline, stating that it cannot be allowed to be shut down.
Why is the Government willing to put its reputation on the line to rescue a private enterprise whose sole purpose is to make profits for its promoters?
Why does the Government want to rescue a man who, in fact, blames the Government for the failure of his airline?
Risks were known
When Vijay Mallya drew up the business plan for his airline, didn’t he know that ATF attracts huge taxes in India; that ATF prices are extremely dynamic and that private airlines operate in a highly regulated environment? If you still want to run an airline, you do so at your own risk. Period. Instead of rescuing the airline, the Government should get the promoters to pay salaries to the employees, force them to sell their assets to recover lenders’ money.
When the employees get their salaries, they will leave, and when lenders recover their monies, they will never lend to him again.
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