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.

VANDE BHARAT - THE FINEST EXAMPLE OF MAKE IN INDIA BY INDIAN RAILWAYS

Train 18 better known as the Vande Bharat took the country by storm in January this year, and rightly so. The first train set of the nation built indigenously for intercity travel, by the oldest coach manufacturer of India, the Integral Coach Factory of Chennai in a record time and at a cost far below what it would cost to import is no mean achievement, besides being a tremendous example of the make in India initiative.    

The success of the T-18 project also brings out the inherent potential and capability of the gigantic railway system that despite its structural limitations, complex bureaucratic systems and archaic processes remains one of the finest symbols of deliverance in the country.

The “Make in India” initiative of the Prime Minister has instilled national pride and enhanced national prestige besides also emerging as perhaps the finest step in recent times towards nation building, with the Chandrayan and Vande Bharat emerging as brilliant examples of this national resolve.  

Such initiatives are unique for they foster innovation, enhance skill development, protect intellectual property and strengthen the manufacturing infrastructure in the country. The impact of the Make in India initiatives on the economic growth of the country is going to be substantial as they also focus on utilising the existing Indian talent base, creating additional employment opportunities and empowering secondary and tertiary sectors. In the long run the ongoing efforts at streamlining archaic laws and regulations, making bureaucratic processes easier and making the working of the government more transparent, responsive and accountable would lead to  improvement in India’s rank in the Ease of Doing Business index.

The first rake of the Vande Bharat train has been making an uninterrupted run between Delhi and Varanasi sans a failure and that speaks volumes about the quality achieved using indigenous resources. It also demonstrates that our home grown industry is capable of rising to the occasion and manufacturing world class products.

The creation of a new design of rolling stock normally takes a painfully long time for fruition. That the Vande Bharat could be rolled out in a very short time frame of eighteen months by the Integral Coach Factory, Chennai is almost a miracle made possible by a team of bright and bold officers led by the General Manager whose belief in the supremacy of deliverance never wavered. Interestingly the creation of this train was preceded by a plethora of sweeping cultural and environmental transformations with the factory emerging as a glowing example of the change that many organizations in the country have been vying for.

Train Sets for intercity travel so common overseas have been a dream for the nation since the last many decades. While the capability and the intent was never in doubt, what was missing was a driving force that could singlehandedly drive the project to completion through the maze of complex processes, archaic rules and procedural constraints. A breakthrough like this needed single minded resolution, will power in abundance and a monumental team effort.

In addition to transforming the bureaucratic systems, ushering in cultural, procedural and structural reforms and simplifying decision making processes, enabling such initiatives to proliferate would need simplified tendering processes and enhanced quotient of trust within the system. The complexity of the tendering processes coupled with supremacy of the L1 leaves tremendous scope for an interpretation based on hindsight and therefore a scenario where decision making invariably gets mired in bouts of fear.  

At the same time there is a crying need to protect and support those who in the interest of delivery and nation building play on the front foot and at times make mistakes identified as such in the hindsight. Treating genuine mistakes as malafide even if done inadvertently would dampen initiative.

The Vande Bharat initiative has given a new dimension to train travel in India. As a shift to “train set” type of trains for inter-city travel is very much needed and the ability to indigenously manufacture is effectively established, it is only logical that this initiative is aggressively taken forward.

In the national interest it is imperative that one of the finest initiatives ever taken by the railways is not allowed to wither away.

Indian Railways bites the bullet

THIS ARTICLE APPEARED IN TIMES OF INDIA OP-ED OF 28TH DECEMBER 2019 

The recent decisions on railway reforms including the one to merge eight different cadres of officers into one vertical are a belated yet a bold move and in the right direction, if handled well. Bold because different governments at different points in time appointed different committees to look into issues related to reforming the railways and several ideas emerged, yet no government bit the bullet. Bold also because while most of the committees spoke about merger on functional lines, but  only one, the Debroy committee gave a specific recommendation, that of merger of cadres into two verticals – one technical and one non-technical.  

Indian Railways is a solid institution by itself. It has survived and regularly reinvented itself over the last 167 years of its existence. Running over 22000 trains a day passing over 7000 stations and piloted by a workforce of over thirteen lakhs, the gigantic railway system of our nation, the largest organization in the planet despite being a fine symbol of deliverance, can and also needs to do much better. Improvement in services and expansion of infrastructure, both need to fast keep pace with the aspirations of a nation on the move.

The recent decision is a continuation of the transformational reforms being actively pursued on the railways since the last two years and need to be viewed in the above context.

Railway officers are often accused of rabid departmentalism. It is true that railway is organized on departmental lines with each department having a cadre of its own. While having departmental bias in an organization that has more than one department is but natural and acceptable but only to the extent where departmental priorities and loyalties do not overshadow those of the organization.

On the other hand there is also a need to appreciate that railways being primarily a technical organization needs specially qualified and trained personnel in officers cadres for manning various facets of its operational necessities.

Efficiently meeting the gamut of specialized requirements without its constituents losing sight of the bigger picture is indeed the need of the hour.

And we have a scenario where the vast majority of officers of all cadres spend their lives within the confines of the department itself without being able to appreciate the bigger picture of the railways. Only those limited number of officers who occupy Divisional Railway Manager and then General Manager level positions, are exposed to the working of the entire railway system, and that too for brief periods. The proposed merger logically should address this anomaly.

The fundamental issue with the railways is not the multiplicity of departments. Different departments are needed for focussed and specialized attention to technical and other issues like HR and Finance. The problem however lies in having officers generally remaining confined to one particular department throughout the career perhaps on the earlier premise that even at higher levels, the technical and specialized content vastly override the managerial one. Staying lifelong in one department may strengthen technical expertise but not managerial and leadership qualities while also resulting in a narrow constricted vision even at higher levels where awareness of the bigger picture, openness to new ideas and thoughts and leadership qualities are required.

Railways had been mulling over reforming itself since the last two and a half decades. A number of committees set up by different governments in the past, namely the Prakash Tandon Committee of 1994, Rakesh Mohan committee of 2002, Sam Pitroda committee of 2012, Sreedharan committee of 2014 and the Debroy committee of 2015, talked about the pressing need to reform the railway structures and processes including possible merger of cadres. They also recommended elevating the Chairman Railway Board from the present status of first amongst equals to a clearly defined Chief Executive Officer, and also about reorganizing the Board on functional lines.  

The scenario where this largest organization on planet earth did not have a clearly identified Chief Executive Officer would now change thereby changing the tenor of the organization.

And a board drawn on functional lines, not departmental would ensure that while the Board members remain focussed towards functional responsibilities, they also have a much better appreciation of the overall picture that helps them to perform better in the assigned role. 

While the carving out of the railway budget from the general budget in 1924 was a clear indication of the then government’s resolve to run railways on commercial lines, however over the decades babugiri caught up in right earnest and brought the organization to a stage where railwaymen always found themselves tied in knots even for performing simple activities, till large scale simplifications and delegations of 2018 kicked in. Inability of the officers of different cadres to align themselves with the organizational objectives simply because of the lack of awareness of the bigger picture resulted in a complex web of knots.  

Merger of cadres is necessary for eliminating departmental bias and encouraging a hitherto unexplored open thought process. It would also open the gates for achieving excellence and encouraging innovation, provided the exercise is handled well, and definitely not like the ill-fated merger of Air India and Indian Airlines, merger that pushed the merged Air India into the abyss.

Mergers are all about amalgamation of seniority groups, in this case about amalgamation of eight different seniority groups into one, an exercise easier said than done. It is also about affecting the aspirations of individuals, most of them bright in the case of railways, aspirations that if not handled well would lead to grouses that can last the entire service career and in the process seriously dent the organization. This is what happened at Air India and we are still suffering.

While the intent is good, the proof of the pudding shall always be in the eating. The implementation of these decisions especially the one relating to merger of cadres would have to be taken forward very carefully in an extremely mature manner duly taking sensitivities and job requirements into full consideration. The framing of guidelines and rules for implementing the merger should be finalized through a consultative process and not rushed through. And the CEO should be given a fixed term of atleast three years for effectively implementing measures for improvements and growth.

Change we must for change should be the only constant in the twenty first century. However every major change leads to concerns, apprehensions and fear among the constituents and therefore often attracts resistance in the initial stages. These would need to be handled with sensitivity. We also need to ensure that the change ushered results in achieving the desired objectives without getting derailed.

The indian public sector

With many public sector undertakings steadily losing their relevance due to sliding market share or becoming financially unviable, the rationale for their existence has indeed weakened over a period of time. This scenario has often necessitated disinvestment, an exercise that would enable tapping the full inherent potential of the undertakings in the national interest.

The emergence of the public sector in the country just after independence was with the avowed objective of enhancing manufacturing and services, especially in areas where the private sector either did not exist or was unable to enter on commercial considerations. The public sector units then fulfilled a very vital need and were also regarded as the temples of modern india.

It was in 1948 that India got its first CPSU in the form of ITI (Indian Telephone Industries Ltd) and their numbers grew thereafter with now almost 300 of them operating across a wide spectrum of sectors such as banking, coal, engineering, power, oil, steel, textiles, airlines, hotels etc. in addition there are also many state level public sector units.

CPSUs were set up to play a pivotal role as envisaged in the economic model adopted by the country in the post-Independence era. Their contribution in terms of job creation, social welfare, and overall economic growth of the nation has indeed been substantial. The policy for setting up of CPSU’s was not only guided solely by profits but was primarily inspired by the need to spur growth in remote and backward areas of the country and generate employment. 

It is however since the eighties that public sector rapidly started losing its sheen due to lack of relevance or financial losses or both. Lack of professionalism compounded by the ever increasing complexity of processes, excessive oversight and over indulgence by the investigative agencies triggered this downslide.

CPSU’s were formed under the companies’ act same as that for private companies with the underlying intent that they should function commercially like the private sector, regardless of the ownership. With passage of time however, the intent got confined to paper for the bureaucratic and political classes could never truly accept a scenario where a flourishing commercial enterprise is under the ministry but not under the thumb.

Another instrument to ensure commercial and administrative freedom, something so vital for running businesses successfully, was the “presidential directive” that can be issued by the concerned ministry to the undertaking only in exigencies, not on normal commercial and administrative matters. Unfortunately over the last few decades, the spirit of this directive has been held more in breach.

PSU’s have unfortunately also often suffered an overdose of oversight, when actually it was neither envisaged nor meant to be. Too many cooks spoil the broth is so true.  

Selection of people for leadership positions in public sector undertakings needs to be based on assessment of leadership qualities and not merely subject expertise. The private sector that on the other hand is finicky while undertaking the process of selection, subsequently gives a very long rope for the selected guy to perform quite unlike the scenario where even the top management lives under the shadow of mistrust from day one. 

Governmental tendering systems that the public sector is mandated to follow while their competition in the private sector is not, cripple creativity and timely deliverance. The system focussed on the L1 is the same for purchasing potatoes, ideas, machinery, IT and in fact anything under the sun. The massive trust deficit coupled with emphasis on processes as against deliverance acts as the biggest road block to implementation. And with investigative agencies glued to finding faults that too in hindsight and treating mistakes as malafide, the process has also achieved the dimension of fear.

The fear of taking a wrong decision, judged wrong in hindsight of-course generally by unconcerned officials and then paying the price thereof has engulfed the managements of the public sector who have generally turned risk averse. Many realize that the best way to avoid making mistakes is to avoid taking a decision and this thought has spelt doom for many enterprises.

Selection of people for leadership positions in public sector undertakings is also an exercise that leaves much to be desired. The brief exercise generally focuses on knowledge rather than the leadership capabilities of the guy under consideration. The private sector that on the other hand is finicky while undergoing the process of selection, subsequently gives a very long rope for the selected guy to perform quite unlike the scenario where even the head honcho lives under a shadow of mistrust from day one.  

The abysmal financial condition of many CPSU’s in most of the cases is not because of lack of effort or capability, but because the rules and procedures mandated are not suited for running enterprises on commercial lines.

The below par realization of the potential and the downhill slide of the public sector is indeed not an acceptable scenario. Disinvestment has emerged as an inescapable administrative compulsion and perhaps the only option. After all governments are not meant to be in the business of running businesses.

Swacchh Bharat - cleaning up corruption

The tremendous stress that the new government is laying on nation building is bound to give results but it would take its time. Nation building demands the toil of generations and definitely does not come cheap. The future, perhaps for the first time indeed looks bright.

One of the fundamental issues that needs to be addressed is the deep-rooted corruption, corruption that has engulfed the entire grassroots to the extent that there is hardly any interaction of the common man with the tantra that is not laced with graft. The common man yes, for the powerful are beyond its grip and the wealthy find a way around it.

Yet not many complain as long as the work is done, for unfortunately corruption has started getting regarded as an inescapable part of the cutting-edge processes.

In my over four decades of working within the system, I never witnessed a serious and concerted drive by my superiors to eradicate this evil from the various organizations. Unfortunate still was the reluctance to even bring this issue on the table and the effort merely remained confined to a review of the working of the assorted vigilance setups without appreciating that it is more of a cultural issue.

The real ease of doing business would indeed come, even for the common man when he does his business with the government at various levels, only when the cutting-edge functions are not laced with graft. For us bureaucrats especially, remaining confined to our comfort zone is the most ideal scenario. Why accept the ills of the system and why try to set it right when our life passes on peacefully handling issues that sound more impressive.

The irony remains that those of us who can change the system remain unaffected by it, and therefore have no stake in the change.

The solution lies in first acceptance of the problem, placing it bang on the table and then going about process reforms with a zeal previously unheard of. Yes, the solution lies in simplification of the various processes that define governance, empowerment of the executive to enable fixing direct responsibility and accountability and having a system of swift redressal of the issues as well as that of exemplary punishment to the delinquent.

The complexity of the tantra is the issue. The plethora of thumb impressions that every decision necessitates ensure that no single bloke can ever be held directly responsible. Such a system only emboldens the inspectors, the keepers of the cutting-edge who demand compensation from the client for every act for which they are getting a salary from the government too.

It is the same for everyone, except the high and the mighty. Whether one is an individual or a corporate, every single interaction with the Sarkar, especially at the cutting-edge level is generally a deal where nothing happens without a consideration.

We have to pause and think. Is it not necessary to go in for reforms – cultural, procedural and structural so that working becomes simpler, graft reduces and delivery multiplies?

Whenever I interact with my friends who are from the corporate world or who are plain simple citizens of the nation, the harsh reality comes out tumbling fast. And my friends on this side of the fence who indulge in governance generally feign ignorance or express helplessness.

We cannot have the mission areas – ease of governance and make in India, compromised by officials embroiled in corruption at the cutting-edge level. Cleansing the muck of decades is definitely not an easy task, yet a task that has to be handled.

One hopes and prays that the massive expectations are not belied.

Dil Mein India, Aasmaan Mein Air India

This article was published in Time of India op-ed on 6/6/2019

Air India, a brand that often fuels emotions and also nationalism is easily one of the most well-known global brands. And why not, with a network of over seventy domestic and forty international destinations, it is an airline with a reach.

Except for the last decade and a half or so, Air India was always regarded as a great airline. This national carrier of India was well known for its service to passengers, with the Maharajah logo being an apt icon. Sadly of late, its sheen faded because of the down slide the airline witnessed since the turn of the millenium, in its finances, market share and services.

Founded by the legendary JRD in 1932, Air India had for long been India's showcase to the world and with marginal hiccups, it continued to perform reasonably well till such time it and its sister domestic airline continued to fly separately. The beginning of the decline also timed itself with the governmental interference that this commercial enterprise in a highly competitive sector started facing in right earnest.

This has been the sad story of the public sector in India. Regularly cursed for inadequacy in performance, the public sector at large has invariably been the victim of the same very people who curse it in the first place. Excessive interference, a plethora of rules, processes & oversight and a pervasive environment of fear has dampened initiative and acumen for taking risks - the most crucial traits required for running businesses successfully.

The merger, pushed through without fully appreciating the chemistry of mergers and apparently to satiate the english word -  synergy, coupled with other decisions forced down the airline, initiated its downhill slide. The ban on recruitment ensured the absence of fresh blood and ideas and the stress on tendering procedures coupled with the over indulgence of vigilance set-ups that rarely differentiate between malafide and procedural mistakes, hastened the free fall.

For businesses, one loss making year is enough of a wake-up call to initiate corrective measures, yet at the national carrier, the debt was allowed to pile up over the years. A turn-around plan that subsequently emerged was by no stretch of imagination as such for it conveniently avoided addressing issues relating to leadership, human resource, processes, delegation and organizational culture, and merely remained confined to equity injection to meet debt service requirements. The plan only helped a sinking ship to remain afloat, not ride on the waves.

Despite being more of a railroader than an aviator, it hurts to witness the descent of an airline that was an iconic one till almost the turn of the millennium. An organization that acquired one of the finest art collections and that in the yesteryears really cared for its men an aspect easily visible in the adequacy of built and acquired residential quarters, had to be a great one.

Yet along the way the organization did stray and piled up a mountain of debt. Simultaneously, neither its growth nor administrative processes kept pace with the changing requirements of the twenty first century. That despite the serious issues it faced and continues to face, the airline still retains its inner strengths - the tremendous reach and operational and technical excellence, indeed says a lot.

It is a harsh reality that governmental systems are ill suited for running commercial organizations in its fold, more so an airline business that is very high on competition, regulation and technology yet has very thin margins that too have a propensity to vanish with the slightest flutter in fuel prices.

For many of us Indians, the sight of an Air India aircraft stimulates a feeling of national pride. At airports beyond our shores it gives the feel that home is right there. The only airline with India in its name shall always evoke this feeling regardless of its ownership.