Wednesday, June 24, 2009

BAD FNANCIAL MANAGEMENT

The decision of the management of AIR INDIA (AI) to defer the salary of its 30,000 odd employees by 15 days is unfair and un warranted (DNA 20-06-09). The reason attributed is resource crunch that the organization is facing. Although AI is facing financial crunch, it is a government of India undertaking. The management of the AI should make necessary arrangement in consultation with the Finance Ministry for release of salary to employees on due date. Employees are the prime assest of any organaisation. Non receipt of salaries on due date, for no fault of theirs will not be appreciated by them. This will have cascading effect on their performance. The talented and experienced may look for greener pastures. Only the average and below average employees will stick to the organaisation since they have no option.This financial crunch alias financial mismanagement has not happened over night.The management was aware of the grave situation for a long time. In spite of very bad financial position, our national carrier has gone for massive expansion plan of nearly Rs50000 crores. This could have deferred for some time.It is reported that AI is seeking Rs. 5000 crores from the Center as equity, apart from a soft loan of Rs. 7000 crores. Hence it would not be difficult to obtain a temporary over draft from public sector banks for payment of salaries for the month of July which may be around Rs. 150 plus crores. The employees have regular monthly commitments like home loan repayment, credit card payment etc. for which they might have issued post dated cheques. If salary is not received on due dates the cheques get bounced leading to further complications. Non payment of salary on due dates is against the principles of Payment of Wages Act and Industrial dispute Act. Instead of delaying the salaries to its employees the management should seek moratorium from lending institutions and banks for the financials commitment with them. APPEARED IN DNA NEWS PAPER ON 22-06-09 ( blr)

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