Contents:

1. Maharaja on sale
2. Alarming spread
3. The continuing theme of Uncertainty, Volatility
4. Restructuring or bureaucratic overkill
5. Protecting trade in a tug of war between nations


MAHARAJA ON SALE

As per the document inviting Expression of Interest (EOI), the government will sell 100% equity in the national carrier and Air India Express Ltd. and its 50% holding in AISATS, the joint venture with SATS Ltd

The government has not addressed a prime hurdle to the stake sale — the fate of 17,984 employees of Air India and Air India Express, 9,617 of whom are permanent.

Apart from the huge employee base, the successful bidder will also have to deal with pension liability for the airline’s retired employees and their perks such as free/rebated tickets

Why is government selling Air india

A whopping ₹30,500 crore has been sunk into Air India since 2012 despite which it has been posting losses.

The best way to save the airline, its jobs and the national exchequer is to sell it

About AirIndia

  • Air India is the flag carrier airline of India, headquartered at New Delhi.
  • It is owned by Air India Limited, a government-owned enterprise, and operates a fleet of Airbus and Boeing aircraft serving 94 domestic and international destinations.
  • The airline has its hub at Indira Gandhi International Airport, New Delhi, alongside several focus cities across India.
  • Air India is the largest international carrier out of India with an 18.6% market share.
  • Over 60 international destinations are served by Air India across four continents.
  • The airline became the 27th member of Star Alliance on 11 July 2014.

ALARMING SPREAD

Why in news?

India is still novel coronavirus free, even as 18 countries/regions have reported 67 cases, as on January 28, according to WHO

Thermal screening of passengers from China will now be extended from seven to 20 airports; around 33,000 passengers have been screened so far.

With Nepal reporting one case, there is a need of thorough check in all the adjoining states

Present scenario in China

  • In China, despite nearly 20 million people being locked down across Hubei province, the virus appears to be spreading with renewed vigour.
  • Cases reported from mainland China have risen sharply — from 1,975 on January 25 to 2,744 on January 26 and 4,515 on January 27.
  • Fatalities too have reflected a similar trend, touching 106 on January 27.

Human to human contact

  • The first case of human-to-human transmission was reported in Vietnam, and now Germany.
  • The virus has long acquired the ability to spread among humans; WHO’s emergency committee meeting statement said China had reported fourth-generation cases within, and second-generation cases, outside Wuhan

What is public health emergency of international concern?

Public Health Emergency of International Concern (PHEIC) is a formal declaration by the World Health Organization (WHO) of “an extraordinary event which is determined to constitute a public health risk to other States through the international spread of disease and to potentially require a coordinated international response.


THE CONTINUING THEME OF UNCERTAINTY, VOLATILITY

Uncertainty in international relations

  • Geopolitical fault-lines widened in 2019.
  • America’s leadership of the world came under increasing threat from countries such as China.
  • The future of the United Kingdom, under the shadow of Brexit, remained unclear. Europe seemed to be in eclipse. Latin and Central America were in turmoil.
  • In Asia, Afghanistan appeared to be at a crossroads in its history.
  • Instability plagued Syria, Iraq, Lebanon and Egypt.

US – Iran Drift

  • It would be tempting to assert that this is perhaps the most troubled time in recent history, given the looming spectre of an all-out war between Iran and the United States.
  • Exertion of “maximum pressure” by the U.S. to minimize Iran’s influence and reduce its support to proxies in the region and elsewhere, combined with Iran’s only slightly less provocative posture as seen towards the end of 2019, had resulted in a major stand-off by the beginning of 2020.

India’s neighbourhood first policy

  • As 2020 commences, India’s foreign policy challenges remain very considerable.
  • India-Pakistan relations remain frozen, even as Pakistan continues to make overtures to the U.S., and further cements its relationship with China at one level and Saudi Arabia at another. Sino-Indian relations continue to be riddled with numerous problems.
  • The vexed Sino-Indian border dispute remains in deep freeze.

Internal threats

  • While India appears reasonably well-positioned to deal with some of the other internal threats, including insurgencies in the North-east, Naxalite violence, and the “terror imperative”, the fallout of protests over the CAA has the potential to become India’s most serious threat in decades.
  • Already, it is aggravating the fault-lines in society and this could become the harbinger of a highly divisive period in India’s recent history

State of economy

  • Economic portents for 2020 also do not look too good.
  • For several months now, the country has witnessed the slowing down of the economy and India’s growth story appears set to lose much of its shine.
  • A sustained below 5% GDP growth could become a recipe for disaster.

RESTRUCTURING OR BUREAUCRATIC OVERKILL?

Why in  news?

The Union cabinet in December, 2019 decided to restructure the high -level workforce in Indian Railway.

What are the changes brought in Railway board?

The proposed changes at the Board are,

  1. Re-designating the Chairman as Chairman and CEO
  2. Reducing the number of Railway Board members excluding the Chairman, from the existing eight to four and rationalizing their responsibilities on functional lines
  3. The induction of four members, from outside the Railway hierarchy in an advisory capacity
  4. Proposal to recruit officers/managers to a single service or cadre to be called Indian Railways Management Service (IRMS) for which the Union Public Service Commission (UPSC) will conduct a separate competitive examination

Problems or challenges in new policy:

  • A single management cadre cannot make the functions performed by the different departments in the Railways to disappear.
  • Some measure of departmental rivalry will always be there under the best of circumstances and in fact may even be beneficial as a means of “competitive tension
  • Silo lessness carried to the extreme can only lead to apathy, neglect and chaos

PROTECTING TRADE IN A TUG OF WAR BETWEEN NATIONS

By the end of the last decade, globalization- the lowering of barriers to cross-border flows of goods, services, investment, and information came under severe pressure

Populist policies in many countries accused others of various economic wrongs, and pushed to rewrite trade agreements. Developing countries have argued for decades that the rules governing international trade are profoundly unfair.

Why sudden shift?

  • In the 1960s and 1970s, industrialized countries focused on opening foreign markets for their goods and set the rules accordingly
  • Developed countries’ current efforts to rewrite the rules look like an attempt not to level the playing field, but to thwart competition
  • Two factors have increased the uneasiness over international trade and investment arrangements
    • Ordinary people in left-behind communities in developed countries are no longer willing to accept existing arrangements
    • Emerging-economy elites want a share of the global market for services, and are no longer willing to cede ground there
  • The trade agreements now has become more of a power play among the nations or power blocs.
  • Over the board restrictions, trade barriers, subsidy and dumping are becoming nuisances in the trade deals. W
  • WTO has been made a mute spectator in the tug of wars between different nations
  • The world will have to understand that Less intrusive trade agreements today may do more for trade tomorrow. 
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