Government Aides to struggling Indian Aviation Industry-justified?
The recent demise of Kingfisher Airlines has thrown up a big question in the context of Indian aviation sector-Should the government come forward and fuel-in aids to uplift the debt-ridden Kingfisher Airlines?
The question would lead to diverse opinions and both viewpoints –‘of govt. aiding the Airlines or leaving it to its own state’ would find its supporters.
An individual having a soft corner for the once –‘king of good times’(The Kingfisher Airlines brand tagline) would strongly agree that the government should do whatever it can to help the airline clear it vast debts and take remedial steps as a bailout package. Steps such as providing relief to the airline by influencing banks to extend loans to the cash-strapped airlines at competitive rates or for that matter provide subsidies on taxes or an indirect help by reformulating aviation policies in favor of the Airline or the bold step of introducing foreign-players as stake-holders in the Indian aviation business.
Sure, the government can do its bit but is it legally or morally obliged to help? And if does, how often? Should the same austerity be extended to other struggling airlines like Jet Airways who too are running into losses and might experience the same spiraling downfall. And if this is so, what about other business-sectors? The construction and real-estate sector who were once facing severe challenges in the face of global recession and ‘the IT sector’ who too witnessed a financial crunch to the extent that they had to layoff employees to cut expenditures-didn’t these too deserve govt. aid and similar bailout packages?
The moot point is that any such remedial action or bailout package for a struggling industry or a corporate major in specific, is merely a temporary solution. Rather than damage control the government needs to analyze the causes that lead to business-sector downfalls. After all, prevention is always better than cure! The government’s responsibility is more towards constant supervision of the various business corporates and monitoring the economic health of various business sectors .Until and unless a systematic model of tracking business sectors and their progress/downfall is developed, demise such as of Kingfisher Airlines are bound to happen on a frequent basis. If the Centre is aware of the rising debts of Kingfisher Airlines, it could have formulated policies to arrest the downfall much sooner..And such ‘just-in-time remedial actions’ often prove to be much more cost-efficient.
More over any government action as a corporate bailout is just an act of shifting pressure on the banking institutions and constraining the already cramped economy which has not yet managed to recover fully from the after-effects of global recession and is again upfaced with challenges in the wake of recent Euro crisis. The growth rate is already slowing down and when the common man is facing the heat of ever-increasing inflation, a govt. bailout package for corporate majors is unprecedented. After all, the government bailout packages are funded by the taxpayer’s hard earned money and this amount is supposed to be invested for infrastructure development of the nation, for providing amenities to the common man and not for extending financial aids to private corporate majors.
The corporates may ask for aids on moral grounds but did they fulfill their social-moral responsibilities towards the nation when they were raking in the huge profits! Not many can answer yes and so not many deserve govt. bailouts in harder times!!
Rohit Kumar Singh