CAG Report on Air India

Confirmation of the crimes of the management and the government

The Report of the Comptroller and Auditor General (CAG) on Air India covering the period 2005-10 has unequivocally indicted the management and the government for the purchase of 50 Boeing aircraft. It points out that the purchase of the said aircraft was not warranted by the level of operations of the Airline.  It is well known that the highest authorities in the government and the Congress Party had a direct interest in the deal, which was to rescue Boeing from a crisis. The purchase was given a green signal by an Empowered Group of Ministers (EGOM). The Ministry of Civil Aviation, the Public Investment Board and the Cabinet Committee on Economic Affairs had all approved the financing of 97% of the purchase cost through debt in contradiction to government norms of project financing. The Report confirmed the fact that this unnecessary and extravagant purchase had caused a loss of Rs 200 crore to the Corporation.

MEL's report (July 16-31, 2011) "What is the trouble with Air India and who is the trouble maker" exposing the step by step process of liquidating Air India towards justifying privatization had reported this purchase as one of the deliberate actions of the government and management of Air India in pushing the Airline into a financial crisis. 

The workers of Air India have been waging a militant struggle against the move of the government to liquidate and privatizing the airline. As of date, Air India's 40,000 employees have not received their salary for June and July and performance linked incentives (PLI) from April to July. Currently, the airline is laden with a cumulative debt of Rs 40,000 crore it incurred over aircraft acquisition and maintenance of its operations. Its cumulative losses have risen from Rs. 475 crore to Rs 60,000 crore in the last three years.

The government and its economic experts have backed the Air India management in its anti-worker policies. All of them have blamed the workers - the pilots, the ground staff, etc for the financial state of the Corporation and justified privatisation as the only way out. However, as the workers have pointed out, it is the policies of the government that have driven the Airline to its present state of crisis.

Subsequent to the revelations in the Report, the CMD of Air India, Arvind Jadhav has been forced to resign. He was appointed, in the first pace, to supervise the well-planned moves to drive the Corporation to this crisis point. So while he must be charged with buying the Boeing aircrafts far in need of requirements, he is part of the larger plan to milk Air India dry in the interests of certain Indian and foreign corporate monopolies. It was public knowledge that the then Minister of Civil Aviation, Praful Patel, had granted profitable overseas routes to other airlines. Several in the government, bureaucracy and capitalists stood to gain from such policies regarding Air India and Indian Airlines. All of them should be brought to book for this attack on the workers of Air India and the general public who are being made to pay for it.


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EGOM    Empowered Group of Ministers    indian airlines    Boeing    Cabinet Committee on Economic Affairs    Public Investment Board    Civil Aviation    CAG    Comptroller and Auditor General    Arvind Jadhav    Air India    Sep 1-15 2011    Struggle for Rights    Economy     Popular Movements     Rights    


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