Thursday, November 13, 2008

The serial bailout ?

Following Wall Street rescue, the opportunistic bug seems to have bitten battered Indian businesses. Politicians, the chief patrons of Indian business turn willing side kicks. Recently Praful Patel wanted Airlines to be bailed out until Chidambaram refused to play ball. He just stopped short of restricting it to friend Vijay Mallya (Kingfisher Airlines) and by extension Naresh Goel (Jet Airways) to limit tax payer burden. Air India, the government run airline never mattered to him as much even as it was notching up losses for several years now and making do with ageing airplanes. It suited his friends better to let the country’s premier Airline to bleed. But it just worked out the other way round – the private airlines began to bleed.

So what to do now? Ha, we take a leaf off Wall Street rescue staged by Hank Paulson, ex Goldman Sachs dealmaker. Bail the airlines out too.

Last week, the stock of Las Vegas Sands Corporation collapsed. Bankruptcy seems a real possibility. Indeed, the whole casino gambling industry in Nevada is facing the worst crisis in at least a generation, maybe ever. Casino gambling directly employs more people than the domestic automobile industry. Add in the supply chain for both industries, and casinos still employ almost half as many people as the automobile sector.

So what about a bailout for the casino industry? Ridiculous! Right? What next? Bailout Matka, then drug dealers, Mafia…? [Dr.Vijay Mallya is a liquour baron!]

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