Prof Arvind Panagariya has very timely and brave article in The Economic Times. It is titled as "Congress' bail out of bankrupt Scooters India is party's gain at nation's loss" Read the tragedies here:
"Prime Minister Manmohan Singh later instructed him to prepare a bailout package in consultation with the BIFR. That proposal has now culminated in the Rs 200-crore dole to the company. To his credit, finance minister Chidambaram protested in the Cabinet meeting but Singh, almost surely under instructions from Congress president Sonia Gandhi, overruled him. It makes no economic sense to throw hard-earned rupees of taxpayers at a company that has been declared sick by the BIFR, a verdict the bureau rarely delivers, preferring to advise restructuring. With an aged workforce whose protection is probably the sole purpose of the bailout, 1970s machinery that should have been retired decades ago and management that hails from civil service and has no real expertise in auto manufacturing, there is no chance that it can compete against the modern day auto giants that together produce 8,50,000 three-wheelers every year.Why did the government ignore the obvious? The easy explanation is politics. Scooters India is located in the capital city of Uttar Pradesh (UP), the home state of the Gandhi family."