Thursday, 20 July 2017

The buzz about the Narendra Modi government's reformist credentials has just got a bit louder, but one cannot avoid experiencing a sense of quality.

 The nature of the initiatives made and the instruments of reforms that have been used by the Modi government will inevitably remind you of what the Atal Bihari Vajpayee government had mooted, though with some variations, more than a decade and a half ago, almost at the fag end of the last century. 

 Three weeks ago, the Modi government had approved the strategic divestment of Air India, a task that was entrusted to a ministerial group headed by Finance Minister Arun Jaitley. There was jubilation over what many saw in that decision — the government's desire to push ahead with reforms, including privatisation. 

 Even before such celebrations over the government's renewed reforms drive could be over, the Union Cabinet on Wednesday accorded an in-principle approval to the proposal of state-controlled upstream oil major, ONGC, buying 51 per cent equity stake in another state-controlled entity, HPCL, India's third largest oil marketing company. 

However, largely due to the absence of credible offers for acquiring the state-owned airlines and the government having second thoughts on the entire issue, the proposal did not make any headway. Eventually, the idea was dropped. 

 Seventeen years later, a period that saw Air India incur thousands of crores of more losses, necessitating the infusion of taxpayer’s money into its equity to keep it afloat, the Modi government, with Arun Jaitley as its finance minister, has once again begun the task of finding a strategic buyer for the beleaguered airline.
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