THE RETURN JOURNEY

The privatisation of Air India, though much delayed, should come as a big relief to the Modi government, which has faced much flak for its apparent inability to come good on its promise to get out of business and focus on governance.

- M.G. Arun

Even though the Tatas’ bid of Rs 18,000 crore was not exactly a king’s ransom—the government gets to keep only Rs 2,700 crore; the remaining Rs 15,300 crore is debt the Tatas have taken on—the Tatas’ bid was nearly 40 per cent higher than the Centre’s reserve price and nearly 20 per cent higher than the only other bid, by SpiceJet promoter Ajay Singh.

Air India is just one of a large number of public sector undertakings (PSUs) the government hopes to disinvest in this year. For 2021-22, the Centre has a disinvestment/ asset monetisation target of Rs 1.75 lakh crore. However, progress has been slow. The sale of firms such as Bharat Petroleum Corporation, Shipping Corporation of India and Container Corporation of India are yet to come through. The government has also proposed privatising two public sector banks and one general insurance company this year.

The Centre’s record in this effort has been patchy. Between 2014-15 and 2020-21, the Modi government targeted raising Rs 6.57 lakh crore through disinvestments, but managed only about 60 per cent of that, or Rs 4.04 lakh crore. In 2020-21 alone, the government had hoped to raise Rs 2.1 lakh crore, but again did about 10 per cent (Rs 21,000 crore), despite the fact that the markets were buoyant for much of the latter part of the financial year.