The government has been mulling over the idea of strategic sale in Air India, from quite some time. But it has not realised its goals. The government plans to sell 74% stake in the national carrier. However, there are few takers. The reason being the government wants to retain its decision making abilities regarding employees restructuring. Also, a mandatory condition that the foreign taker, will need to take within its ambit, thousands of employees. In other words, restructuring of employees will be the prime responsibility of the foreign investor. Such pre conditions have kept the foreign investors away from acquiring majority stake.
Let us analyse how it can be achieved. The solutions need to be multi pronged. Innovative ones will be appreciated.
1. Divide the employees into several groups. Each group of employees shall be transferred to other public sector companies. No cost will be accrued from the employees in the process. The groups will be based on the liking of the employees to join sectors such as energy, petrochemicals, steel, construction, banking, transport, communication, etc. The sectors mandatorily need to be public. After they are absorbed, 74% to be divested to the investor. Because employee restructuring is the point of concern.
2. Drop the idea of 74% divestment. Take risk and go for 100% divestment. The government may have a plan B, if this fails. But not having plan B, will not do much harm. Remember, greater the risk, greater the benefit. (Plan B can be a MoU with the investor that, after privatisation, the competition shall be fair, in accordance with the rules, with other private organisations. Competition Commission of India will have a bird's eye view in case, the privatisation turn bad.)
3. Make it mandatory, for minimum 2 investors to acquire the stake. The combination can be 50%:24%: 26%. Where 50% and 24% goes to the two investors and 26% comes to the government. the benefit from this will be two fold. First, the employee restructuring now needs to be done among 3 players. Two private players and the government. More the number of players, more hassle free will be restructuring. Or the combination can be 25%:49%:26%, where the government will have only a slight upper hand, as compared to the investor with 25% stake. This will make the private investors more comfortable(because government decision making ability will be diluted)
4. Offer the gulf nations carrier special advantage if they acquire a stake in Air India (considering that there is an open sky policy with some of the gulf nations). Added advantages can be, sipulating certain norms/MoUs with nations like Saudi Arabia, where government will ensure minimum number of passengers to Haj every year via Air India.
5. On similar lines, added advantages can also be offered to ASEAN nations like Malaysia, Singapore and Pacific Island nations like Fiji. We have a substantial India diaspora in these nations.
These 5 ideas are out of box and provides means to achieve the objectives. Where there is a will, there is a way!
In point No.2 and 4, substantiate with examples. For e.g, we can say that Hindustant Machine Tools was 100% privatised. Similarly, in point no. 4, we can say, Air Asia had agreements with gulf nations
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