Jagran Opinion: IndiGo Crisis Highlights Need For Political Accountability In A Privatised Economy

India’s largest airlines IndiGo which controls 65 per cent of the country’s domestic air passenger market suddenly began cancelling hundreds of flights earlier this month. Flight cancellations continue though the situation has stabilised to a considerable extent. This turmoil caused great hardship to thousands of passengers and damaged India’s overall image. The government stepped in to control the situation and ordered an enquiry to fix responsibility for this case of extreme mismanagement. It also ordered IndiGo to immediately refund the passengers, and locate and return their baggage. On December 9, Civil Aviation Minister Ram Mohan Naidu met the airlines management. He ordered the airlines to reduce its flights by 10 per cent and follow all government directives.

While the enquiry will establish the reasons for the collapse of the airline’s flight schedule, it seems that one of these was that IndiGo did not take steps to obey government orders relating to a reduction in the work schedule of pilots. This naturally required IndiGo to increase its number of pilots but it did not do so despite availability of sufficient time. The government acted to control the situation after the crisis had emerged. The question however that needs examination is whether it is the duty of the government to take action to prevent such situations even in cases of private companies whose mismanagement can cause enormous harm to the public and the country. This naturally also leads to the issue of political accountability. This issue is not related to any particular government or party but to the entire political class and India’s political culture.

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There is a need to distinguish between public sector and private companies. The former are owned by the government. They are managed by executives and have a board of directors to direct their activities. However, the government has a direct responsibility that they conduct themselves properly. This governmental responsibility is discharged by concerned ministries as mandated in the Allocation of Business Rules. Hence, the government through the concerned minister is accountable to Parliament for these public sector companies. Thus, before the era of privatisation, when only government airlines were allowed, if the airline had failed to prevent the kind of meltdown in its flight schedule as happened with IndiGo, the Civil Aviation minister would have to answer questions in Parliament.

It is true that actual operations of public sector companies are managed by professionals and that the concerned ministers are not expected to intervene in these operations on a day-to-day basis. However, it is their political duty to ensure that proper systems are put in place and that these are handled by senior civil servants who have to keep them informed of the health of these companies. Thus, the civil servants have to ensure that the minister is warned of any emerging problems which can impact the welfare of the public. The minister cannot make the excuse that the civil servant kept him in the dark because it's also the responsibility of ministers to select proper civil servants who perform their duties effectively. All in all, the political accountability of government and concerned ministers to Parliament and through them to the people is direct in the case of public sector companies. It is a different matter that for many decades now the political class has always sought to pass on responsibility for administrative failures to civil servants and managers. It was only in the early years after independence that ministers took moral responsibility and even resigned. That era passed long ago. The case of corruption in companies linked to ministers falls in a different category.

With liberalisation, major sectors of the economy were opened up to the private sector. Consequently, now there are cases of companies such as Indigo who control very large portions of a particular industry. This is not only confined to essential commodities as, defined in some laws, but also those sectors which are not under such laws. For instance, cement and power generation are such sectors. The failures of private companies in these sectors can have a major negative impact on the economy.

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These large private companies are managed by boards with independent directors who are supposed to ensure that the companies are run in accordance with the laws and rules and regulations. It is clear that the IndiGo board did not do its duty. As public interest is involved in the functioning of these companies, mechanisms have to be put in place which will ensure that the authorities are alerted in time that all is not well with the company. This will not mean that there will be government interference in the way the company is managed. This will require that both government and the companies act with discretion and sensitivity. However, there is enough maturity in the political class and the industry for this. Certainly, as a beginning, the regulatory bodies will be well within their rights to demand to see how a company is acting to follow changed regulations. In the IndiGo case, the question is if the Director General of Civil Aviation (DGCA) monitored if the airline was hiring pilots needed to enforce the new regulations. And, if it was, did it keep the Ministry of Civil Aviation informed and further, if that was so, did the senior officers of the Ministry keep the Minister informed? These questions need answers not to criticise the conduct of the officials and the minister but to ensure that proper lessons are learnt from the IndiGo case. And, some form of administrative and political accountability norms are put in place.

The Indian economy is rising. It is expected that by the end of the decade it will become the world’s third largest economy. The main engine of growth will be the private sector. It is essential that the current problems of IndiGo lead to a search for the ways to ensure that the mismanagement of companies does not impact the public and the economy. It would also be necessary to ensure that no company has such a large share of a critical sector that its problems harm the country.

(The writer is a former diplomat. The views expressed are his own.)