If there was ever a doubt whether Government of India is capitalist or socialist, the Jet Airways saga puts all the suspicions to rest.
We have a rational private investor – Etihad who wants to take the first flight out of the company. At the same time, there is a Government of India who wants the ailing carrier to keep flying even though it cannot shell out for its aeroplanes.
There is an owner who cannot pay the debt incurred by his company. Yet he has a respectable exit and can even buy back his company at a discount when put on sale.
What would this mean for the future of Indian business? Why is Government of India doing what it is doing? Finally, is there any silver lining for the paying Indian public?
Government of India can very well run Swiggy / Zomato / Uber / Ola
Who would be the biggest employers in India today? You guessed it right. The food-delivery apps and the ride-hailing companies. These companies are anyways never to going to make money with their business models. So, when Softbank / other VC funds decide that they have had enough, what would happen?
To save the jobs, the Government of India would step in and start running the food-delivery / taxi business. The Government is rescuing Jet Airways saying that it is good for the customers and the employees and Jet Airways cannot be sent to IBC as it is a service-sector company. With these actions and words, the Government of India is laying down the template for the future course of action in such circumstances.
Government of India can revive Kingfisher Airlines
With the bailout of Jet Airways at taxpayers’ expense, Vijay Mallya is crying foul in London. He is pointing out the double standards of Indian public sector banks which did not help his airline. For once, he has a point.
To correct this anomaly, for the betterment of the Indian aviation sector, employees and customers, Government of India can look to restarting Kingfisher. To avoid charges of corruption, they can name Air India as Kingfisher or maybe Spicejet (after all Ajay Singh is being advised to take over 40 planes of Jet Airways, he might heed to this bit of advice also). Or Government of India might as well run Jet Kingfisher Airways.
After all, what is it that Naresh Goyal has, which Vijay Mallya did not have?
It is not Jet Airways, but Air India stupid
Government of India tried selling Air India. Unfortunately, they did not get anyone stupider than their own selves. So, what to do next? Government of India takes over Jet Airways and understands how to give a makeover to a dud airline so that it can get sold off. It is a learning curve for Pradeep Singh Kharola, the Civil Aviation Secretary, who failed to get a single bid when in-charge of Air India.
This is a brilliant strategy of Government of India – killing two birds with one stone. Just that, this stone is going to fall in the eye of the thrower and the two birds are going to fly away.
SBI account holders can ask for a Jet Airways ticket at Rs 1/-
SBI is getting majority stake-holding in Jet Airways at Rs. 1. It has not come out with the details of the debt getting converted into equity – basically the write-off amount. This is what the SBI account-holders will pay, also the Indian taxpayers.
So, what can they expect? Savings account customers can lead a rally to their SBI branches and SBI can please them with the Jet Airways flight ticket at Rs. 1.
This will surely make everyone happy.
The stellar history of Indian banks getting their money back Indian businesses
SBI is also presiding over another case of non-paying Indian corporate house – Reliance Anil Dhirubhai Ambani Group. SBI and Indian Banks believe whatever the promoter has to say. They have not been paid a single rupee out of their outstanding loans. And an unsecured creditor – Ericsson has received its payment from RCom by threatening to send Anil Ambani to jail.
With such a backdrop, it was to be understood why SBI would go along with Naresh Goyal. To work hand in glove with select Indian promoters comes easy to Indian bankers – public or private.
No wonder why Urjit Patel was packed off and what great benefit Shaktikanta Das is bringing as a banking sector regulator.
Naresh Goyal privatized the profit of Jet Airways. Government of India has made the Indian public partner in the loss of Jet Airways.
Socialism at best.