THE HINDU EDITORIAL  30, June 2017

a) A welcome sale

With the Union Cabinet’s ‘in-principle’ approval for the sale of Air India and five of its subsidiaries, a long-standing demand on the reform checklist has been ticked. The rationale for the government to shovel in huge sums of money to keep the loss making airline afloat was weakening by the year. Today, such life support, as Finance Minister Arun Jaitley recently noted, was being given when competing private airlines already cater to well over 85% of the air travel demand in the country. Government money that keeps Air India from going bankrupt would be much better used to fund important social and infrastructure programmes that are starved of precious capital each year. Air India has been surviving on a ₹30,000-crore bailout package put together by the United Progressive Alliance government in 2012 to help its turnaround, and the debt relief provided by public sector banks. The airline has a debt load of over ₹50,000 crore on its books, and it is estimated that even a well-executed asset sale may not fully cover its present liabilities. So in the event of a sale, taxpayers may have to foot at least some part of the loss — either directly in case the government pays of the airline’s creditors, or indirectly if the public sector banks write of their loans to the airline. However, it is more likely that the government may divest its three profit-making subsidiaries separately, with the proceeds going to Air India to help deal with its liabilities. It is not yet clear whether the airline will be fully privatised or how its eventual sale will be executed. A ministerial panel under Mr. Jaitley is expected to begin working on the details soon. But having taken the politically courageous decision to privatise Air India, the government would do well to go for the sale of its entire stake, even if it is done in a gradual manner. Eventually, the aim of the sale should be to get the best price for the airline. One good way to achieve this would be to allow both domestic and foreign buyers to bid freely for stakes. For this, the government will have to re-tune its FDI policy to allow foreign investors to buy a stake in Air India. The Civil Aviation Ministry has made a case for the sale of non-core assets first to pay off existing creditors, so that the airline becomes more attractive to private buyers. But this assumes that private buyers would not otherwise see the value in Air India’s assets. IndiGo has already expressed interest in buying a stake in Air India, with other domestic airlines reported to be serious about making a bid too. Finding a way to deal with Air India’s debt load will be the main challenge for Mr. Jaitley’s panel. How this process goes will be vital not just for Air India. If it goes relatively smoothly, that would make the task of moving forward on the disinvestment of other public sector units that much easier.

b) The plains truth

Two months after the first phase of local elections, Nepal has completed the second, and more tricky, phase. This week’s polling in provinces in the Terai plains and in the far-eastern and far-western parts completed the first elections to local bodies in two decades. In the first phase, the Communist Party of Nepal (Unified Marxist-Leninist) was in the lead, winning the highest number of councils and wards, with the Nepali Congress coming a distant second. The UML had steadfastly opposed any change to the Constitution finalised in 2015, specifically amendments that would allow a redrawing of the provinces, as demanded by the plains-dwellers, the Madhesis. This approach helped it strengthen its “nationalist” image in the hills. The second phase has been a more difficult proposition for the UML. Voter turnout in this phase was close to 70.5%, while it was 74% in the first phase. The high turnout, despite incidents of violence in areas that went to the polls on Wednesday, indicates a grassroots yearning for inclusion and the deepening of democratic institutions. Among the Madhesi parties, the newly formed Rashtriya Janata Party-Nepal boycotted the polls as its demand for amendments to be made to the Constitution before the polls was not met. But sensing the public mood for participation, it fielded independent candidates in order to consolidate support. The state restructuring demand had been articulated during the jan andolans (popular struggles) of 2006. The demand for federalisation was repeated in the agitations in the Terai in 2015, which had led to an economic blockade of the valley by the plains-dwellers. But despite these agitations, the issue remains unresolved as strident opposition by the UML has prevented any consensus over amendments that would realign the provinces so that the Madhesis are in a majority in more provinces than those delineated in 2015. For the Madhesis, federalisation is a desperate demand for recognition and inclusion, as the hill elite dominates the various layers of the government, the bureaucracy and the security forces. The threat of an electoral boycott was meant to be a pressure tactic to get the Central government led by the Nepali Congress and the Communist Party of Nepal (Maoist Centre) to live up to the promises of pushing for the requisite amendments in Parliament. But as the local elections were widely welcomed by the electorate, including the plains-dwellers, this was a self defeating step. This is why two other Madhesi forces —the Federal Socialist Forum and the Madhesi Janadhikar Forum Loktantrik — decided to participate in the elections. However, the three big parties — the UML, the Congress and the Maoists — should not misread the high participation level as marking a change in outlook in the plains on state restructuring. Madhesi faith in democracy must be secured with the promised amendments.

WORDS/ VOCABULARY

1) Rationale

Meaning: A set of reasons or a logical basis for a course of action or belief.

Example: He explained the rationale behind the change.

Synonyms: Reasoning, Thinking

2) Shovel

Meaning: Move (coal, earth, snow, or similar) with a shovel.

Example: She shovelled coal on the fire.

Synonyms: Move, Shift, Heap

3) Afloat

Meaning: Floating in water; not sinking.

Example: They trod water to keep afloat.

Synonyms: Buoyant, Floating

Antonyms: Sunk, Sinking

4) Cater

Meaning: Provide people with food and drink at a social event or other gathering.

Example: My mother helped to cater for the party.

Synonyms: Feed, Serve

5) Bankrupt

Meaning: (Of a person or organization) declared in law as unable to pay their debts.

Example: His father went bankrupt and the family had to sell their home.

Synonyms: Insolvent, Failed

Antonyms: Solvent

6) Turnaround

Meaning: An abrupt or unexpected change, especially one that results in a more favourable situation.

Example: It was a remarkable turnaround in his fortunes.

7) Bid

Meaning: Utter (a greeting or farewell) to.

Example: James bade a tearful farewell to his parents.

Synonyms: Wish, Require

8) Steadfastly

Meaning: In a resolutely or dutifully firm and unwavering manner.

Example: The manager steadfastly refused the offer.

9) Turnout

Meaning: The number of people attending or taking part in an event, especially the number of people voting in an election.

Example: We reckon that thirty-five per cent is a good turnout for local elections.

Synonyms: Attendance, Audience

10) Yearning

Meaning: A feeling of intense longing for something.

Example: He felt a yearning for the mountains.

Synonyms: Craving, Desire, Want

11) Boycotted

Meaning: Withdraw from commercial or social relations with (a country, organization, or person) as a punishment or protest.

Example: We will boycott all banks which take part in the loans scheme.

Synonyms: Spurn, Snub

12) Consolidate

Meaning: Combine (a number of things) into a single more effective or coherent whole.

Example: All manufacturing activities have been consolidated in new premises.

Synonyms: Combine, Unite, Merge

13) Agitations

Meaning: A state of anxiety or nervous excitement.

Example: She was wringing her hands in agitation.

Synonyms: Anxiety, Perturbation

Antonyms: Calmness, Relaxation

14) Strident

Meaning: (Of a sound) Loud and harsh; Grating.

Example: His voice had become increasingly strident.

Synonyms: Harsh, Raucous

Antonyms: Soft, Dulcet

15) Elite

Meaning: A select group that is superior in terms of ability or qualities to the rest of a group or society.

Example: The elite of Britain’s armed forces.

Synonyms: Best, Pick

Antonyms: Dregs

16) Bureaucracy

Meaning: A system of government in which most of the important decisions are taken by state officials rather than by elected representatives.

Example: The unnecessary bureaucracy in local government.

Synonyms: Civil service, Administration

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