Given a choice, I will sell Air India completely: Arun Jaitley

Talking to Supriya Srinate of ET Now, Finance Minister Arun Jaitley points out that in the domestic sector, 86% of passengers are already flying in private airlines. Whether it is 86% or 100%, it does not make a difference. Air India can continue to be a national carrier and somebody else pay for its management.

Edited excerpts:

The market is a little worried about is that is the bank NPA may be beyond resolution right now. What gives you the confidence it can be resolved?

It is not beyond resolution. The problem is not so widespread. Bulk of the problem is confined to certain accounts, 30, 40, 50 accounts. So, we have now expanded on the oversight committee experiment. Then the RBI has the overall power. We have already started making a list of certain set of companies and once you go cracking on the first five or seven companies and what is it that you are going to do.

You are going to use the mechanism under your insolvency law and you say that either you pay up or you take a partner if that is needed or you exit in favour of somebody. There are people with hoards of money. There are funds with hoards of money. There are people who want to come in. Once somebody cannot run a company, he cannot make the whole asset non-performing. We cannot allow it to rust. Then, somebody else who has the money and resource and can run it should come in. The present status quo – “okay I do not pay up, what can you do to me” that attitude needs to be cracked.

We did see RComm almost on the verge of a default. I do not want to talk about a specific case. They, of course, have got a lifeline now for the next seven months. Will you be willing to make special provisions for a sector like that. Instance in point is allow spectrum to be a collateral? Is there some amount of discussion on that too?

The telecom department and the regulator will look at all proposals because telecom in India over the last two decades has been a huge success story and you do not allow success stories to create a problem and therefore it is a mechanism where you have a minister or a ministry running it. You have a regulator which is managing it and therefore it is the job of the regulator and the ministry to make sure that competition continues to exist

It is a fair competition and you do not have all balance sheets of players in the sector going into the red and eventually translating into a problem for the banking system and that is something which is absolutely not acceptable. Both the department of tele communication and the regulators therefore must rise to the occasion and they cannot preside over a successful sector sliding down.

I appreciate your concerns even on something like competition but is telecom witnessing hyper competitive streak that needs to go away?

I can understand a good competition. When you have a big new player who enters and gives you a rate, it becomes a consumer friendly environment because then everybody has to pull down the rates and that is what seems to have happened.

But then what is the extent to which it can go? After all the whole concept of predatory pricing is something that is per se anti- competitive. If you acquire a dominant position and then are anti- competitive and therefore I am sure the concerned sectoral or the general regulators will look into these issues.

Is that also bothering you because that has an obvious implication on your own revenues being hit?

Revenues is an important concern but if you have a healthy sector, the revenues in the long term are going to come. Just for the cause of my one year revenue, I cannot allow a sector to slide down.

Is it worrying you at all that with the kind of layoffs one is seeing in IT because this will dent consumption?

Well when you have technologies changing and when you have disruptions because of newer technologies or for some other economic factor, you will see in one sector a job loss but then when jobs are lost here, they are created elsewhere. I think this is a flawed argument, jobs do not grow outside the economy. If you continue to grow at about 7.5-8%, in the economy in the formal sector jobs will be created and I am sure there are a lot of jobs being created in the informal sector.

Given the job crunch are you more open to now reviewing labour sector reforms, for instance allowing corporates to at least hire temp contract labour?

This is an argument one has to very carefully weigh. Carefully weigh in the sense that it is very easy to say it in the course of a meeting or a interview or a seminar that alright you have done all this reforms, what about labour sector? Now labour and land are to very delicate areas. You embark upon those reforms which are possible. We have been trying to reform the labour laws, ease the procedures but which are the reforms in this country which are being held up because of labour? I can see one or two sectors where there is a problem because there is still a public sector monopoly, the railways has it, in some states the state transport buses have it but I think by and large, Indian labour movement is a very responsible movement.

You once in an interview had said to me that privatisation is not a bad word and even in the Vajpayee government it had happened. Are you willing to privatise the Air India just yet?

I have already said so. And I have a given a good reason why it should be privatised. If you are going to spend a huge amount, the public debt itself is Rs 50000-55000 crore. Is this money to be spent on healthcare? Is this money to be spent on irrigation? Is this money to be spent on education or running an airline particularly when your experiment of bringing private sector into your airports and into your airlines is highly successful?

In the domestic sector, already 86% of passengers are flying in private airlines. Whether it is 86% or 100%, it does not make a difference. Air India can continue to be a national carrier and somebody else pay for its management.

Are you going to find takers for Air India with debt levels of nearly Rs 60,000 crore?

The debt levels will have to be matched because a part of the debt is also in the aircraft that it owns. Air India also owns a large number of very valuable properties and that can bring down the debt levels itself and then it has some very powerful connections and routes and therefore if you do a due diligence and see its potential globally, the government will also have to step in and take a part of the share but the whole debt of Rs 55000-60000 crore will come down substantially.

You are not at least not dilly dallying or skirting the issue as some of your other colleagues are?

Given a choice, I would personally go with what the Niti Aayog has said.

Which is to sell it completely?

To sell it completely.

Do you think you can arrive at a consensus on that within the...

I do not think in the government there are two views on this.