Privatization of ‘Air India’ – Good or Bad?

air india

Background :-

  • In June 2017, Union Cabinet approved the recommendation of NITI Aayog to privatize government owned ‘Air India’.

Good :-

  • Debt burden will be reduced. Currently Air India has more than Rs. 50,000 crores debt due to maintenance expenses.
  • Privatization will increase competition and hence the quality of services will be improved.
  • Air India’s market share in Aviation industry is just 14%. So, it is not wise to spend Rs. 50,000 crore public money on Air India.

Bad :-

  • Instead of privatizing, granting autonomy can lift Air India from losses according to employee unions. They opine that too much government control caused losses to Air India.
  • Employee unions are arguing that privatization will lead to job losses especially for those who fall in the reserved categories as private sector has no obligation to follow the reservation policy.
  • Air India has to clear the salaries due to its staff. Privatization move without clearing these dues will create uncertainty.
  • As Indian government is maintaining BSNL as a National telecom channel & All India Radio as a National broadcasting channel, it should maintain Air India too as a National carrier.

Conclusion :-

It’s better to privatize commercial things and government should concentrate on welfare schemes. In case of high price rises due to privatization, government can impose restrictions on rates.

Afterwords :- Do you think privatization of Air India is a good move? Express your thoughts in the comment section below.


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5 comments

  1. I am satisfied with the conclusion but there are a few points I would like to add;
    – Looking at people’s opinions, private sector businesses are much more efficient than public sector businesses. This might be because private sector businesses mainly aim for a gain in profit which is why their costs must be controlled. Private sector businesses are also ready to give up capital for the improvement of the business which the government can’t afford to pay for.
    – Private sector businesses have a lot of competition which encourage them to spend more capital on the goods and services which greatly increases the product quality. Government does not have any competition which is why they are not inclined toward spending more capital on the improvement of the business. If the business is owned by the government, tourists and other customers will stop coming to these airlines because they will be provided with the same old goods and services which might lead to decrease in economy.

  2. i think it is better to ,privatise because lot of public money is to be spent to lift it from indebtedness.

    1. True that !!! The conclusion also opines the same that it’s better to privatize commercial things like air travel to reduce the burden on government.

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