Sunday, 13 November 2011

Kingfisher & Government Support

The news papers and internet news portals are abuzz with the crisis at Kingfisher Airlines. Some reports indicate Government of India stepping in to "help". Infact our beloved puppet prime minster chacha Manmohan Singh has made a statement suggesting that he will talk to the civil aviation minster on ways & means of helping KF Airlines.

This is a disgrace, why should government help a private airline? Yes, there are many passenger staranded, the employees are worried for their jobs and it is not a good situation for them.

But why are rest of us Indians accountable for decisions made by private individuals? Why can't I or many others get a bailout for our bad investment decisions when the stock market crashes or prices of something falls? Is that a legitimate role of government? If government starts rescuing everyone one who fails there will be no end to it. It also the case of privatized profits and socialized losses.

This "rescue" package for KF airlines means it is a package for the banks. It is bailing out banks indulged in careless lending decisions. In-fact I think they engaged in "name lending" i.e. lending to KFA & Vijay Mallaya's name rather than the KFA's financial standing.

I'm outraged at what my government is doing....making arbitrary decisions and helping people who have made poor decisions. By the way where is the money going to come from? Recently GoI has given Air India a whopping Rs 23,000 crore. And, this is neither the first one nor will be the last Air India will receive.  That will also be the case of KFA it will need a lot of money. GoI does not have this money it will print it, borrow or have to tax....... all of them are bad and burdensome on the citizens.

All these are being done in the name of saving jobs, helping the needy blah blah.  Best way to help passengers & airlines to bring down entry barriers by de-regulation and reducing taxes.
This bailout will create even more moral hazard......... leaving us all less poorer.
What a shame :-(

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