Companies & Sectors
Air India sacks 47 cabin crew members for absenteeism

The decision of Air India to crack the whip comes amid reports that several cabin crew members were on the lookout for greener pastures, especially eyeing jobs in Gulf carriers

Taking a tough stance to ensure discipline, state-run carrier Air India has sacked 47 members of its cabin crew and issued show-cause notices to 20 more for absenteeism.


According to senior airline officials, while all of those sacked are stationed in Mumbai, 17 of those issued the notices for not showing up for three months without any intimation also belong to the western metropolis and the rest from Delhi.


However, those issued show-cause notices could re-join duty by 30th June after fulfilling necessary requirements and getting certified for sickness, if any, from Air India doctors, the officials said, adding that such disciplinary action taken on a regular basis has now become a deterrent for a total cabin crew strength of about 3,500.


The decision of Air India to crack the whip comes amid reports that several cabin crew members were on the lookout for greener pastures, especially eyeing jobs in Gulf carriers.


The officials said the prevailing work hours for the cabin crew stood at 125 hours per month or 1,000 hours each year, but those being sacked or issued notices have not put in even a single hour of duty in the recent past.


The prevailing manpower strength of the national carrier stands at about 14,000, after a total of 9,000 employees being shifted to Air India's subsidiaries Air India Engineering Services Ltd (AIESL) and Air India Air Transport Services Ltd (AIATSL) which became operational last year.


By 2017, around 7,000 staffers would retire, leaving the parent company with about 7,000, they said, adding Air India would then have one of the "best aircraft-manpower ratio" with an average age of 45-48 years. The ratio currently is about 240 per aircraft which would come down to around 100.


Building a Better India – Part 8: Boosting coal production

Over the past five years, Coal India's profit jumped 735% to Rs17,356 crore by just raising coal prices while employee expenses grew almost double. However, between the same period, its coal production increased by just 5%

Coal shortages have been caused mainly due to the inefficient and monopolistic Coal India Ltd (CIL), and road blocks created by Ministry of Environment and Forests (MoEF) in the development of new coal mines. Any bottlenecks in coal production has a cascading effect on all major industrial and household sectors in India, including power generation. CIL was formed upon nationalisation of coal mines with the noble purpose of increasing coal production, to provide better amenities and safety to coal miners and to provide coal to Indian industrial consumers at a reasonable price. It has largely failed in its objectives. Shockingly while CIL’s production has remained near stagnant for last five years it’s employee expenses have doubled to Rs27,320 crore.

CIL has increased coal prices by 60% in just last five years, an act of virtual extortion resulting in its profit jumping to Rs17,356 crore in 2012-13 against just Rs2,078 crore in 2008-09 (by 735%) while coal production marginally went up just 5% to 452 million tons (mt) from 431mt during the same period.     


CIL’s Subsidiaries should be made independent and decoupled from it
All seven coal producing subsidiary companies of CIL should be made absolutely independent in their ownership and operations, and should be freed from the clutches of CIL. The holding and subsidiary company relationship should end and all of them can be listed on stock exchanges.

After unbundling as above, let there be healthy competition between these seven self contained independent companies on the lines of Hindustan Petroleum Corp Ltd (HPCL), Bharat Petroleum Corp Ltd (BPCL) and Indian Oil Corp (IOC).

These seven coal producing companies can jointly promote a separate company, exclusively to carry out the bulk and economical procurement of mining and other equipments on their behalf. Similarly, these companies can form a joint committee to interact with railway authorities for placement of rail rakes for smooth movement of coal.

Consultancy firm Deloitte and the 12th plan document has also recommended decoupling of these subsidiary companies but Minister of Coal on 13 February 2014 refused to accept it.

Poor quality of coal and no redressal mechanism

CIL has no proper, fair and mutually acceptable arrangement for quality testing of coal, as a result the customers are forced to accept and pay for whatever CIL dispatches, even if it is stones or mud mixed with coal. The recent tussle on the quality issue between NTPC and CIL amply proved this point.

Mystery behind allocation of coal blocks/ reserves without any consideration

It is strange and mysterious as to how huge coal reserves, limited in quantity and not replenishable, unlike air waves/spectrum, were allocated to private parties selectively without charging any consideration through an open bidding process.

The best way out of this whole messy affair and controversy is to cancel all coal allotments made from 1999 to 2012 by executive order/ordinance barring those that have already seen investment and started mining. Thereafter, CIL should reallocate the same to actual and genuine user industries in small parcels, based on their captive requirement for next 15 to 20 years through an open auction by keeping a reasonable floor price.

Once coal blocks are reallocated against payment of suitable monetary consideration, there will be urgency on the part of new coal blocks allottees to invest and start mining. The present coal blocks allottees are not serious in mining and are waiting for further appreciation in the value of their coal blocks.

Fuel Supply Agreements (FSA) are drafted in a most biased and partisan way with all terms favouring only CIL. These must be scrapped and replaced with a new one based on equity and equality.

Authority for deciding coal prices

Coal prices should be decided from time to time with a holistic approach by an independent multi-member minerals commission and not by the proposed coal regulator, which is just an advisory post with powers of fixing coal prices staying with CIL and Ministry of Coal. This will curb the sort of impunity because of which CIL had overnight increased the price of higher grade coal from Rs2,140 per tonne to Rs4,920 per tonne in a single stroke effective from 27 February 2011.

Coal Mafia

Coal mafia and organised gangs are rampant and they not only pilfer coal but also forcibly extort money from consumers. This crime has been continuing since decades and is known to everybody. The government and administration can demolish this illegal racket if there is strong determination and will.

You may also want to read...

Building a Better India-Part1: How to create a smaller and smarter government

Building a Better India-Part2: Transforming political landscape

Building a Better India – Part 3: Bringing systemic changes in constitutional bodies

Building a Better India – Part 4: Identifying tax issues

Building a Better India – Part 5: Bringing tax reforms

Building a Better India – Part 6: Fast track clearances

Building a Better India – Part 7: Managing India's Deficit

(Kolkata-based Dalbir Chhibbar practised as a CA till 1990 and later started his own buinsess)


SEBI to tweak ESOP norms?

The proposed regulations would be applicable to employee stock options/ purchase scheme as well as on other general employee benefit schemes such as the case of accident, sickness, disability, death and scholarship funds

Market regulator Securities and Exchange Board of India (SEBI) may announce a new set of employee stock options/purchase scheme (ESOP) regulations, including purchase of shares by employee welfare trusts from the secondary market with adequate safeguards.


The Primary Market Advisory Committee of SEBI has suggested some changes and the market regulator had sought public comments on the recommendations. The final norms have been prepared after taking into account these suggestions and they would be placed before SEBI’s board on Thursday.


The proposed regulations shall be applicable to the employee stock options scheme and the employee stock purchase scheme, generally called ESOP guidelines, as well as on other general employee benefit schemes such as the case of accident, sickness, disability, death and scholarship funds.


If fresh shares are proposed to be issued against employee benefit schemes, then the company may have the flexibility of either adopting the trust route or implementing it directly, SEBI said.


In case secondary market acquisitions are proposed under the scheme, the same must be implemented through a mechanism of trust.


“The trust route provides for better governance of schemes. Considering that secondary market transactions necessitate adequate safeguards, trust route may be made mandatory for schemes to undertake secondary market transactions,” SEBI said.


The trust may hold the shares acquired from secondary market for a minimum period of six months.


However, within the said holding period of six months the trust may be allowed to tender shares in open offers, buybacks and delisting offers or any other exit offered by the company to its shareholders.


No off-market transfer may be permitted, except to employees pursuant to the scheme, the market regulator said.


To ensure “independence of trustees and to create an arm’s length relationship” in the operation of trust, SEBI suggested that a person shall not be appointed as a trustee to hold the shares if he is a director, key managerial personnel or promoter of the company or a beneficiary holding 10 per cent or more of the paid-up share capital of the company.


Those companies which have acquired shares from the secondary market in excess of the maximum permissible limits could be given a longer time period of five years from the date of notification to come down to the permissible level.


For general employee benefits and retirement benefit schemes holding more than the prescribed limit is proposed to be given more than five years period from the date of notification to reduce the same to the permissible level.


SEBI has also proposed to extend the timeline for alignment of existing employee benefit schemes with the ESOP guidelines till 30th June, this year.


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