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AAI Board questions UPA’s airports privatization works

Created on 15 March 2014

Chennai airport image courtesy AAI

United Progressive Alliance (UPA) Government’s controversial attempt to privatize six airports has drawn flak from the Board of Directors of Airports Authority of India (AAI).This is expected to inspire AAI employees to up the ante against privatization.

At its Board meeting held in December 2013, certain members supported the recommendation of a Parliamentary Standing Committee (PSC) that construction, operation and maintenance of airports should remain with AAI. PSC on Transport, Tourism and Culture has also recommended that AAI “should be empowered to take decisions to generate resources rather than handing over the core activities of the airports newly constructed with public money to the private players.”

According to informed sources, the newly inducted nominee of Ministry of Civil Aviation on the AAI Board sought to restrain other directors from taking a stand on the PSC’s recommendations. The official, an IAS officer, contended that it was for the Government to take suitable action on such recommendations. AAI board need not take any stand on PSC’s recommendations.

He also claimed that the decision to privatize the six airports at Chennai, Kolkata, Ahmedabad, Jaipur, Lucknow and Guwahati has been taken by the Government and AAI.

At this, certain directors wanted to put on record their stand against privatization. The Board has thus officially placed on the record the fact that certain members agreed with PSC’s recommendations that AAI may be permitted to manage and operate the six airports as it had the requisite capabilities.

Boeing pacifying Air India on its nightmare with Dreamliners

Created on 27 February 2014

(Dreamliner image-courtesy AI)

“The Boeing 787 Dreamliner is an incredible technological achievement – one that sets a new standard for innovation,” exuded U.S. Transportation Secretary Ray LaHood on 26th August 2011.

On that day, Federal Aviation Administration (FAA) approved production of Boeing 787 Dreamliner with similar self-congratulatory claims that turned out to be unrealistic.

FAA stated it had issued production certificate to Boeing “following a rigorous review by FAA inspectors of Boeing’s quality system, production tooling, manufacturing processes and controls, inspection methods, and supplier control procedures.”

FAA added: “The engineers, inspectors and flight test pilots all worked diligently to ensure our high safety standards were met.”

How dubious these claims have turned out can be gauged from the plight of Air India, one of the biggest customers for the Dreamliner. It is anybody’s guess whether FAA has accessed records of both AI and Boeing on the AI’s nightmarish experience of taking delivery of Dreamliners from Boeing and their subsequent commercial flights.

Records show that Boeing has tried to pacify AI by issuing a letter, amending the Dreamliner Purchase Agreement to account for serious snags in main landing gear (MLG) seals delivery system of the aircraft.

Longest,‘Glide Path’ for ‘Nimble’ Fiscal Policy Deepens Uncertainty

Created on 13 August 2024

Unveil Inter-Generational Equity Policy as part of fiscal reforms

“The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year. The Government is committed to staying the course. From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central Government debt will be on a declining path as percentage of GDP.”

With this impressive self-certification, Finance Minister Nirmala Sitharaman concluded Part A of her 2024-25 budget speech on 23rd July2024. The certification is backed with eye-popping claims tucked away in one of the budget documents titled ‘Statements of Fiscal Policy’ (SFP).

The document comprises two statements that were earlier presented as separate documents. These are: 1) Macro-Economic Framework Statement (MEFS) and 2) Medium Term Fiscal Policy (MTFS) cum Fiscal Policy Strategy Statement (FPSS).

One would have to struggle to close popped-up eyes after reading all claims in latest & previous SFPs, four-times amended Fiscal Responsibility and Budget Management (FRBM) Act, 2003 and many times more-altered FRBM rules.

One should weigh official claims against recommendations on fiscal discipline & accountability made by successive Finance Commissions, IMF’s country reports on India, Finance Ministry-appointed expert committees’ reports & independent studies from Asian Development Bank and institutions such as Indian Management Institutes.

Time Ripe for PM to Signal Revival of Stalled Fiscal Reforms

Created on 07 January 2023

Fiscal Deficit-Heavy Budget Papers (Image Courtesy: PIB)

Would Prime Minister Narendra Modi apply his Gujarat Model of commitment to fiscal reforms at the national level? The trigger for this question is the mothballed fiscal law reforms at the Centre and its knock-on, adverse impact on States.
Both International Monetary Fund (IMF) and Comptroller & Auditor General (CAG) have flagged this inertia in their relevant reports released last month. These muted reports, however, don’t reveal three disturbing facts.
These are: A) Four-years’ holiday in presenting statutory, annual Medium-term Expenditure Framework (MTEF) to Parliament, thereby fueling economic uncertainties. B) The Finance Ministry’s (FM’s) blow-hot, blow-cold stance on amending Fiscal Responsibility and Budget Management Act (FRBMA), 2003. 3) Deafening silence on fiscal and debt reforms recommended by 15th Finance Commission (15thFC). Its final report was made public in February 2021. (https://bit.ly/3qOaNyo)
Before detailing these facts, recall what Mr. Modi, as Chief Minister, stated during June 2013. He articulated Gujarat’s fiscal reforms at an interaction with Mr. Jim O’Niell, a world-renowned economist who coined the name BRICS. The interaction was aptly captioned ‘Achieving India’s Full Economic Potential’ .
Mr. Modi recalled how he turned around Gujarat state finances from “severe fiscal deficits” into revenue surpluses. He also referred to enactment of the Fiscal Responsibility Act by the State. His government was thus able to allocate more money on the development front, he explained.
Mr. Modi agreed with Mr. Jim’s 2008 research paper titled ‘10 Things for India to Achieve its 2050 Potential’. The fifth item in this agenda was ‘Introduce a Credible Fiscal Policy: A Medium-Term Strategy’.
At that time, Mr. Jim was top-notch expert at Goldman Sachs and he had co-authored this paper with Tushar Poddar, then Chief Economist at Goldman Sachs’ Indian office.
On 23rd May 2019, Mr. Jim wrote a gentle reminder on this invaluable vision at a Bloomberg website. The article was captioned ‘Will Modi Turn To The Ten Things Needed To Deliver India’s 2050 Potential?’
Pitching for “A Credible Fiscal Policy”, he wrote: “I tried to persuade Modi’s advisors, and have publicly stated many times since, that India should consider some ‘Golden Rule’ for its fiscal policy framework.”