Why Didn't the Government Save Jet Airways? The Role of Governance and Corporate Responsibility

Jet Airways, once a reputable name in the Indian aviation industry, has faced numerous challenges and ultimately entered liquidation. This situation raises an important question: why didn't the government take proactive steps to save Jet Airways, especially since it has a history of supporting Air India?

The Nature of the Government's Role

A government's primary function is to govern and regulate, not to engage in the business itself. This principle is crucial in maintaining integrity and fairness in the market. Intervening to bail out a private entity like Jet Airways with taxpayers' money, simply because there are 20,000 employees at stake, could set a dangerous precedent.

Supporting such actions would encourage other dubious businessmen to siphon off funds into their private offshore accounts, then pass the cleanup burden to the government. Such a move would create a moral hazard, leading to irresponsible corporate behavior, and would be highly detrimental to the economy's future growth prospects.

Why Air India, Not Jet Airways?

The Indian government has its own airline, Air India, which it can use to address the needs of the aviation sector. When a private airline like Jet Airways encounters financial difficulties, the natural inclination would be to leave it to market mechanisms and let it resolve on its own. After all, if the government intervenes in every private entity, it would lose its credibility and efficiency in governance.

It's worth noting that when the government does intervene, it often chooses to do so through its own national carrier, Air India, reflecting a strategic approach rather than a knee-jerk reaction.

Political and Practical Considerations

There are several compelling reasons why the government has not taken a more proactive stance on Jet Airways:

Lack of Political Will: The government might not want to engage in the complex issues surrounding Jet Airways, which include a large workforce and potential financial risks.

Procedural Constraints: The timing of any governmental intervention is crucial, especially during election periods where political debates might overshadow necessary decisions.

Existence of a Government Plan: There might be a plan in place, but certain complex issues need to be resolved first. Plans often take time to finalize and implement effectively.

A meeting has already taken place at the PMO (Prime Minister's Office), indicating that steps are being taken, but complex procedural and political conditions must be addressed before any decisive action can be taken.

Conclusion

The debate over the government's intervention in Jet Airways highlights the delicate balance between supporting private enterprise and ensuring sound governance. While it is understandable to empathize with the 20,000 employees affected, the long-term health of the economy and the market should not be compromised. As India continues to grow and evolve, finding the right equilibrium between public and private sector responsibilities will be critical.

Keywords

Keywords: government intervention, Jet Airways, Air India, private enterprise, moral hazard