Why Blame Unions for the AI Mess?

As I read and watch the whole shindig about the free falling Air India, I just can’t help but go back to 1987 when I was a young Bombay based hack (Yes, it was called Bombay back then!). Rajiv Gandhi was still hugely popular and corporate India was delighted with his efforts to help India Inc. Rajiv Gandhi wanted to improve the performance of state run organizations and the most prominent initiatives were directed towards Doordarshan and Air India. A young, dynamic Rajan Jaitley who had a successful stint in ITC was made the MD of Air India and given the job of revamping the ailing (yes, it was ailing back then too!) carrier. A young Ratan Tata too was inducted to the Board as a sentimental gesture; after all, Air India was the brainchild of J.R.D Tata. Back then also, there were strong rumours of a rift in the Board and allegations of mismanagement. Yours truly had even written a story that-if my memory serves me right-started off by asking: “What was Ratan Tata doing when Rajan Jaitley was busy redesigning air hostess uniforms and changing the crockery at Air India?” Last known, Jaitley was operating out of London and Delhi, running a financial services consultancy. Around that time, another young high flier called Harsh Vardhan was running the ambitious Vayudoot, the third state owned airline after Indian Airlines and Air India. Vayudoot claimed to service more than 100 destinations and I recall how everyone was going gaga over this wonder boy and his Vayudoot magic. Most hacks talked of the “close relations” Harsh Vardhan had with the sons of a certain Union Minister who then lived near Hotel Le Meridien. Of course, Vayudoot crashed into extinction very soon after that hype. Last known, Vardhan was a consultant for the private airline MDLR.

Why am I on this nostalgia trip and what has the past got to do with the present controversy that rages around Air India? Well, the point is, the more things change, the more they remain the same. It was natural then for those privileged enough to fl y to curse the shoddy attitude and service of “unionized” employees of IA and AI (Only the brave dared to fl y Vayudoot whose aircraft oft en had doors suddenly opening in mid-flight!). And now, the Civil Aviation Minister is peddling the same arguments blaming the “unionized” employees and the crisis facing commercial aviation for the disaster looming at AI. Most in the media seem to be lapping up this argument.

But hang on for a while. How can you blame employees for gross mismanagement that has persisted decade after decade? How about the politicians and the clutch of IAS officers who now routinely head the carrier? The simple fact is: Air India is unluckier than its public sector counterparts. In other public sector companies, it usually only one cabinet minister, a few state ministers and their cronies who have the privilege of financially raping and pillaging the company. In the case of Air India, every M.P, every senior bureaucrat and most state level politicians of India enjoy that freedom to rape and plunder. And they do it brazenly in the form of free flights, lucrative contracts and what not. That is why Air India is on its last legs now. Why blame only the employees?

Why Blame Unions for the AI Mess?

Revisiting Ten Indian Gospels

Back in February, the Indian media had acquired a hysterical edge, dishing out story after story of a looming economic Armageddon; of collapsing growth and of a meltdown in India Inc. This magazine had taken a contrarian view and listed out ten reasons why the India growth story will continue despite bad news from across the world. Now that good news is pouring from across the country, it is time to once again list those ten gospels that define India. They are:

• Since FDI accounts for less than 1% of GDP, a fall in foreign investments-even if that were to happen-will not make much of a difference.
• Falling exports will become a fact of life for a while; but again with minimal impact since India has the lowest exports to GDP ratio of major economies.
• In India, consumption accounts for 65% of growth while investments account for 65% of growth in China. So falling investments will impact India far less than China.
• The largesse doled out by the Sixth Pay Commission will ensure that millions of middle class Indian families will keep buying goodies. Sales figures across diverse sectors like electronics, auto, telecom and tourism bear this out.
• We talked about how the myriad welfare schemes launched by the then UPA government will have a strong impact on semi-urban and rural India despite corruption and leakages. The election results have shown that these schemes made the Indian voter happy-the way only money can make you happy!
• India continues to have the highest real rate of interest in the world and the magazine had clearly predicted-not that it needed any rocket science or wisdom that interest rates will fall. They are falling-though not by as much this columnist would like.
• Even as banks in America and Europe teetered on the edge of bankruptcy, Indian banks – with a few rare exceptions – were boasting of incredibly good balance sheets. Financial figures for 2008-09 bear that out with a vengeance.
• Even as others saw gloom and doom for India Inc., this magazine said that good Indian companies will in fact emerge stronger and maybe even make more overseas acquisitions. Look at what Bharti has done just recently with the South African telecom giant MTN. Look at the results announced by India Inc. for 2008-09. And look back again and eat your words for being needlessly alarmist and hysterical!
• Expectations in India are so low that even bad news is accepted with famous Indian equanimity. Barring overpaid fat cats, most middle class Indians have an almost genetic ability to do more with less. And they have been doing that since October 2008!
• The last ‘Gospel’ that this magazine had mentioned was the simplest and yet the most complex one to comprehend. It is called democracy and the innate ability of the Indian voter to prove all so called pundits, experts and psephologists wrong. India badly needed a stable government and at a time when doomsday prophets talked of multiple Prime Ministers, democracy delivered what India needed – a stable government that will not be blackmailed by “allies”.
  I rest my case.

Revisiting Ten Indian Gospels