India is the best place in the world for business. Exhibit A in the case for this statement will have to be Kingfisher Airlines.
Few governments would go as far as the Indian government has to save a private airline. To be sure, the government created a moral hazard the moment it decided to bail out state-owned Air India. Kingfisher’s woes have brought about a change in rules regarding the import of fuel by airlines, and will soon see a relaxation in the policy on investments by foreign airlines in Indian ones.
Meanwhile, banks are being forced to lend more money to the airline, throwing good money after bad. No one seems concerned about the fraud perpetrated by the airline in deducting tax from the salaries of employees, but not paying it to the government.
And the airline continues to cancel flights with impunity. Just what is it about Kingfisher that it has to be kept afloat?