Air India: Any takers for the Maharaja?

Mohini Bhatnagar
13 September 2001

Mumbai: It took just one stroke of a pen to snatch away the privy purses of the maharajas 30 years ago. But the present National Democratic Alliance (NDA) government at the centre is finding it increasingly difficult to effect the privatisation of this Maharaja, Air India (AI).

Call it a quirk of fate or the irony of history; the Air India privatisation plan is largely dependent on the Tatas, whose founding father, JRD Tata, had laid the foundation of the national carrier. With no foreign takers for the airliner, only the Tatas are left in the fray to bid for AI.

The government says it will have to change the rules of disinvestments if the Tatas too decide to withdraw from their bid. Earlier, Singapore Airlines had withdrawn from the fray saying it was doing so because of the widespread opposition from political groups, trade unions and the media.

Singapore Airlines also expressed dismay over the overall economic scenario in the country that did not allow the government to act swiftly on key policy issues.

Though the government had declared, while presenting the budget for the year 2001-02, that it would raise Rs 12,000 crore through disinvestments, it has failed to divest its stake even in a single public sector undertaking.

After Singapore Airlines' decision to withdraw, the Tatas are exploring possibilities to form a consortium with Delta-Air France combine to bid for the government's stake.