It is important to understand the reason for the government to be in a particular business. In most instances, the government need not be in one, yet we see otherwise. Such a legacy needs to be derailed. How do we deal with such a legacy? One way is to let such businesses remain and take whatever comes. That approach was visible in the case of BHEL, BSNL, MTNL, etc.

Clearly, the government did not seize the moment to get the value it deserves out of its monopolies. Building a monopoly is vastly different from monetizing a monopoly in time before competitive forces chip away the core of the business. The importance of getting value out of a monopoly should not be undermined by the government. The Air India story of 68 years shows how the government took over a monopoly, sustained the monopoly, and destroyed the monopoly when faced with competition. It is evident that the government has limited capabilities to work beyond building a monopoly.

Monopolies created by the government don’t work well for society. In the interest of society, it is necessary that the government monetizes such monopolies, create better accountability, house better management structures, and utilize the valuations of its monopolies for its future priorities. The Air India sale doesn’t bring in any significant money. In fact, the government stands to lose more than what it makes. The reward is that the government stops making those unsustainable and rising losses. In that sense, it is a stop-loss moment for the government.

The government needs to stop loss on serval other such ventures to ensure that its resources are used for the future benefit of our society.

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