Air India story

All the major public enterprises that came my way had one commonality – its bureaucratic and political masters missed no opportunity to castigate the organization and its men for its problems. 

It however does not stand to reason that anyone other than the owner can be assigned the primary blame for the decline of an organization. We are yet to hear of a private sector enterprise in which the blame for its debacle was laid at the altar of its employees as it is invariably the owner who partakes of the nectar of success or the poison of failure.

It is indeed grossly unfair that Air India and its men have been unfairly castigated almost always for its dismal state of affairs. This very unfair reality needs to be placed in the right perspective.  

Air India and Indian Airlines were two perfectly fine airlines till they were merged in 2007. The decision to merge was not of the airlines but that of the owner, the Government of India and more specifically the then Ministry of Civil Aviation. This merger was not a minor affair for it put in great turmoil both organizations with seniority groups merging both at officer as well as staff level. With differences in HR policies, pay scales, designations, processes, structures and above all culture there was no way this merger could have led to anything other than a nightmare. The Justice Dharmadhikari committee that followed and in all fairness made efforts to sort out the imbroglio yet the merger stoked the very divide that it sought to extinguish with issues and emotions continuing to simmer even after over a decade. The organization immediately thereafter started following a downward trajectory that resulted in losses piling up.

The then government also took another decision, often regarded as controversial, that of purchasing planes of both Airbus and Boeing variety in bulk. And in all fairness it can be said that had that not been done, Air India of today would not be an airline for there would have been no planes in its arsenal. What really affected the airline badly was making it take loans to pay for the massive purchase. Even after some planes being sold off subsequently, the capital burden on account of purchase of planes and the interest charges thereon almost equals the equity infusion so far by the government against its so called turn-around plan.   

It is evident that the oft repeated statement of a dole being extended to Air India for its survival does not hold water. It is simply a case of the owner of a company paying for the capital goods purchased by it at the owner’s specific instance.

Both the loans taken for aircraft purchase and the piling up of losses triggered by the merger took the airline into a debt trap. And these losses the company started accumulating immediately after and because of the merger, a situation aggravated by the ban on fresh recruitment, high fuel prices, increasing competition from the private sector and at times an inept or conniving management. Yes the fact remains that the company was allowed to be in losses for almost ten years at a stretch, a totally unacceptable scenario.  

There is generally nothing wrong with the indian public sector except the way it is governed and the way it governs itself. Public sector enterprises that need to compete with the private, like the national carrier find themselves at a serious handicap for the inherent restrictions imposed by the general financial rules, tendering processes, multiplicity of masters and the onslaught of the three watchdogs that treat a mistake or a malafide on the same footing, make survival in a competitive environment almost untenable.   

It is a very difficult scenario that the public sector in India is generally faced with, yet it performs and therefore needs to be lauded not castigated. And moreover it is not as if the constraints are cast in stone, these are process issues that can be addressed provided there is a will. 

The Indian Public Sector is indeed at crossroads. Hamstrung by crippling constraints and castigated for inadequate deliverance, it has found a solution in disinvestment. The crippling constraints, dampen deliverance and the only way their potential can be fully exploited is by letting them free, an environment that only the private sector can provide. 

There are no easy answers, and the easiest path therefore emerges as the only alternative.  

Moving ahead with merger

The newspapers in recent times have carried reports about many railway officers representing against the merger of cadres.

It is a fact that any change in its wake brings about a slew of concerns and apprehensions. And if the change was given the go by just to alleviate the concerns, the world would not have witnessed the positive changes that have come about with time more so in the twentieth century. And the biggest phenomenon of recent times is that the pace of change is growing at a very fast rate.

Since almost the past two decades, restructuring of railway cadres has been a much debated subject as it has been visualized as a move that would synergise the railways into delivering better and meeting the expectations of a nation on the move. And why not, railway has always been a major factor in driving the economy and the better it becomes, the better it would be for the nation.

While the present decision to merge various railway cadres into one is a bold step, it is definitely not a panacea of the ills plaguing railways. The main issues with railway have been almost static passenger fares, highly bureaucratized processes, the mismatch between authority and accountability, lack of a long term vision and often taking commercial decisions on political considerations all of which together make moving forward a very difficult proposition.  

There is a need to settle these basic fundamental issues and there is no rocket science about that. These are issues that can easily be settled internally if mandated.  

Over the years various committees have also been set up to deliberate on issues plaguing railways and almost all have spoken about the need to restructure the various cadres and a few years back the Debroy committee had recommended merger of the officer cadres into two verticals – technical and non-technical.

Whenever mergers are discussed, the talk invariably veers to the ill-fated merger of Air India and Indian Airlines. These two airlines merged and in the process, officers and staff of various similar departments merged. It was not like railways wherein the merger of dissimilar cadres of officers would take place and to that extent, the railway merger may bring more complexities in its wake than the Air India one.

During my tenure with the Board, often the issue of departmental silos was discussed and various possible solutions were debated. While it is true that the current structure has flaws that hamper the exploitation of the full potential of the organization, the fact also remains that railway despite its inner contradictions has delivered uninterruptedly. However keeping in view all aspects including the fact that even at higher administrative grade levels the technical content of the job cannot be merely wished away, the best the Board could then visualize (not finalize) was permitting general managers to laterally move HAG level officers across departments after considering all aspects of the decision.

What makes mergers a serious business?

Mergers are all about merging two or more seniority groups into one. And seniority groups are all about promotional avenues and promotional avenues are all about aspirations and hence have a direct bearing on the productivity of individuals and consequently the output of organizations. Any act that can adversely affect the aspirations of a large section of employees can affect motivational levels, commitment, and pride in the organization and hence impact the organization itself. This exactly is what happened at Air India where each department even after almost a decade since the merger has a big chunk of disgruntled employees. In the case of the railway, there are eight separate cadres drawn from two different streams and differences in age profiles may lead to permanent scars due to issues related to career progression.    

The decision to merge eight cadres into one also overlooks the need for specializations. And organizations, railways are more of a transport company than a mere policymaking ministry, need specializations. After the merger of seniority groups into one, promotions and postings have to logically and legally be based on that list leading to officers occupying posts often at times without regard to the expertise and experience required for handling that assignment, with attendant ramifications.  

There is no denying that the decision to merge the eight cadres is a bold move considering the restraints that departmental biases have been placing on the organization. We should definitely move forward and the bold decision enables that, yet there is a need to appreciate that the twin issues relating to aspirations and specialization can lead to serious problems that cannot be merely wished away and would necessarily need to be suitably addressed.

We also need to appreciate that it is not possible to alleviate all concerns and major changes are painful exercises, yet having been a railwayman all my life, it pains to see the organization in turmoil.

While there is no doubt that the railway needs to transform, we need to tread with concern, care, and sensitivity to ensure sustainable success.