Interview of the week: H N Ananth Kumar

States

India Today, December 28, 1998
Dec 28, 1998

H N ANANTH KUMAR
"I'll turn Air-India around soon"

In the eight months that he has been Union civil aviation minister, H.N. Ananth Kumar has rarely managed to stay out of the news. Be it the proposal from the Tatas to start an airline or the shabby treatment meted out to officials of India's top industrial house over the proposed new airport at Bangalore, Kumar has consistently courted controversy. For months now, trouble had been brewing between the ministry and the joint board of Air-India (AI) and Indian Airlines (IA) over the proposal to approve a holding company to run the two airlines -- something the minister had vehemently been opposed to. Last week, in a midnight move, Kumar struck back. He ordered the sacking of the entire board and constituted two separate boards, comprising officials of his ministry as well as experts from the financial sector, evidently to tighten his department's grip on the two carriers.

Ananth Kumar It will be quite a while before the results of this sudden move begin to show but already questions are being asked about the minister's motives for taking such a drastic step. The board had not consulted the minister before announcing the merger plan on December 7. So was it plain pique? Or was it truly aimed at instilling a sense of professionalism in the two airlines -- both neck deep in debt. AI's losses this year are expected to touch Rs 341 crore while IA is likely to see last year's meagre profit of Rs 45 crore turn into a loss of Rs 200 crore this year. A merger, its protagonists say, would have improved the efficiency of operations and streamlined the two outfits, making them more capable of taking on the competition from other airlines. But Kumar's ministry had other plans: the Government wanted to deal with the two airlines separately and had plans for disinvestment in both. As such, it was clear that a merger would hit the disinvestment process badly, particularly since the financial position of AI was precarious. Besides, Kumar and his ministry had a few axes to grind: though the ministry had opposed the recent 11 per cent fare hike in IA, the board pressed ahead and had its way ultimately; more recently, while the ministry was keen on the induction of 50-seater aircraft for IA, the board insisted such aircraft would not be viable for the airline. The proverbial last straw was the board decision to give the nod for the merger. Kumar reportedly was livid. What followed was last week's boardroom massacre. As an AI director said, "The merger was aimed at saving both the airlines. What we got instead was a kick in the butt."

Kumar's backers, however, say his was a sound decision aimed at strengthening the financial positions of the two airlines. The new incumbents who have been appointed by the Government suggest that it is keen to sprint along the disinvestment route, and on its own terms. Editor Prabhu Chawla and Associate Editor Harinder Baweja interviewed Kumar. Excerpts:

Why the sudden, midnight restructuring of the board?
It is a very bold step. The earlier decision of having a joint holding company for Air-India and Indian Airlines led to nothing. Since 1993, the board had not been performing. Now we have decided on a disinvestment programme and will soon be looking for a strategic partner to make them globally competent. Each will have functional autonomy. I am not for merger. What we require is synergy. It's like having a happy marriage.

You have only replaced one set of babus with another.
Running an airline is essentially like managing a transport company. What you need are good managers who have vision.

Do you think only the IAS is capable of that?
Over 50 years they have been chiselled into that role. I don't say they are experts in aeronautics but they can be management experts. People elect us and as ministers we are given different portfolios. Some excel not because of expertise in the field but because of their approach.

In eight years, Air-India has not been able to buy a single plane. Who do you blame -- the ministers or the babus?
It's a collective responsibility and therefore, collective liability. That is the system. It comprises babus and ministers.

You encourage babus, they encourage you and in the end it's the airline that stands destroyed.
This measure is to strengthen Air-India and Indian Airlines. Under my leadership, the Government has taken a very bold decision to disinvest in Indian Airlines by 51 per cent and we are pushing the same for Air India. The Government has shed majority equity and all this has happened in the past eight months.

Do you believe in competition or not? The Tata airlines proposal was not cleared because you thought it would impair Indian Airlines.
Tata airways has not been rejected. They withdrew the proposal after five months and I want to place this on record. In fact, successive governments didn't allow them. They had to wait under three different governments for two different proposals. We only said we require six weeks to make a capacity statement.

You don't apply the same rule for Jet Airways and are not investigating them like you did the Tatas.
Jet never came to me. They are giving us stiff competition, I acknowledge that.

Is that because a senior BJP minister has a personal interest in Jet Airways?
That's not true. We have an open sky policy. See, I inherited a bad legacy. Till June 11 there were no guidelines. I was the first minister to issue them.

Air-India seems to be at the service of the prime minister and other VIPs and is not allowed to function as a corporate body.
Air-India's losses are to the tune of Rs 340 crore and I am trying to reduce it by Rs 100 crore through proactive measures. I am trying to change things. For disinvestment and finding a strategic partner, I was told it would take three years but I'll turn AI around soon -- within a year.

You think you will still be the minister one year later?
The Government will definitely complete its term under Atalji. In fact, we will take the country into the 21st century and the Civil Aviation Ministry will be charting the flight of the country's progress.

What do you think were the reasons for the BJP's dismal performance in the assembly elections?
The reasons are accumulative. Price rise was a major issue. You see, there are constraints because you have to make tremendous moves to create a consensus, even though Atalji's tenure has been spectacular. Look at the track record -- nuclear tests, settlement of the Cauvery dispute and NRI involvement through Resurgent India Bonds.

Yet they didn't vote for him.
In the five years that P.V. Narasimha Rao was the prime minister, he lost election after election ...

And finally the Centre...
But that will not be the case with the BJP. Our electorate is very mature. They know their choices and that's why they have put us at the Centre.

Your Government is constantly remote-controlled by Nagpur. You are an RSS man. What do you think of their interference?
I am very proud of my RSS training and background. It is an open air university which inculcates values such as discipline, fearlessness, patriotism and dignity of labour. They are not interfering but if at all they worry it's because they are concerned about integrity and have a nationalist mindset.

By holding dharnas and threatening and criticising the government's decisions?
They are expressing their views and views of all hues should be considered. Nobody is dictating terms, nor blackmailing us.

Do you consider the RSS a cultural or a political organisation?
It is a nationalist organisation.

Are they in politics or out of politics?
I joined the RSS since it is a nationalist organisation. They don't indulge in party politics. There is a difference between the two. When I think of Mahatma Gandhi or Jayaprakash Narayan, I don't think of party politics.

So swadeshi is part of national politics?
There is only one parameter to measure national politics and that is to see if the decisions taken are in national interest or not.

Is opening up the insurance sector in national interest?
That is the decision the Government of India has taken in national interest.

If the RSS asks you to quit the Cabinet, will you?
I am inspired by the Sangh but whatever directions come to me have to come from the party. I am directly accountable to the BJP.

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