Finshots Daily Do government bailouts work?
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May 13, 2025 The discussion dives into the controversial topic of government bailouts in India, questioning their real impact. Case studies of Air India and Yes Bank highlight the challenges in using taxpayer money effectively. The conversation advocates for structural reforms instead of quick fixes, examining whether these bailouts genuinely resolve deeper issues. It raises critical questions about accountability and long-term sustainability in corporate governance.
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Air India's Bailout and Turnaround
- Air India accumulated massive losses over nearly a decade before government bailout.
- Tata's takeover post-bailout improved operations and may lead to profitability by FY27.
Yes Bank's Recovery Story
- Yes Bank faced a crisis due to risky loans and non-performing assets.
- RBI intervention and SBI-led capital injection stabilized the bank and improved profits.
Vodafone Idea's Ongoing Struggles
- Vodafone Idea struggled after Jio's entry and a hefty government dues verdict.
- Govt converted dues to equity and waived spectrum charges, but company's survival remains uncertain.