Friday, November 11, 2011

No government bailout for Kingfisher, it can approach banks: Vayalar Ravi

The issue of bailout of ailing airline Kingfisher got political color with BJP expressing itself against such "Communist-era practice" while Congress treaded cautiously.

"There is no case for a government bail-out of Kingfisher Airline.... We cannot support such a step. The practice during Communist era when the government used to take over sick private sector units and run them at a huge cost and loss to the government has been given up," BJP leader Yashwant Sinha told reporters.

At the AICC briefing, party spokesman Manish Tewari struck a cautious note. "It will be better if you ask the question to the Civil Aviation Minister. You are raising a fundamental issue whether government should take the initiative to bailout a private company or not. In what context the government has taken the decision, he can better explain".

Tewari insisted it was a conceptual issue whether in a market economy the government should go the extra mile to bail out a sick company or allow a shakeout to take place which will ensure survival of the fittest.

As against this, BJP said the idea of bailing out a private sector unit is not acceptable today. Sinha maintained post-liberalisation the practice of supporting ailing private sector units- especially the heavy industries- was given up.

Earlier Civil Aviation Minister Vayalar Ravi said he would talk to the Finance Minister so that some assistance from lead banks is granted to the cash-strapped airline.

"Whether it is private or public sector is immaterial. It is an Indian carrier", the minister said.

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