Govt paid USD 5,882,353 Ratan Tata to buy Air India in 1953, Ratan Tata Paid USD 239,512,845 government in 2021 to buy it back
New Delhi: The government announced on Friday that the Tata Group won the bid to purchase national carrier Air India, the airline founded by JRD Tata in 1932.
Air India’s return to the Tata fold happened after 68 years of being a government company. The Jawaharlal Nehru government had taken over Air India through nationalization in 1953. Back then, the government had paid Rs 2.8 crore ($5,882,353) to Tata Group and took over a 100 percent stake in the venture. In 1953, one USD TO INR was 4.76.
Now Ratan Tata paid 18000 crore government to buy Air India back, which is around USD 239,512,845. Nowadays one USD to Indian Rupees is 75.75.
For the record, JRD Tata and Ratan Tata come from different branches of the Tata family. But they shared a close relationship. JRD Tata founded Tata Aviation Service in 1932 with an investment of Rs 2 lakh and piloted the first flight of Air India, then called Tata Air Mail.
Welcome back, Air India 🛬🏠 pic.twitter.com/euIREDIzkV
— Ratan N. Tata (@RNTata2000) October 8, 2021
It was a cargo flight. It soon became a profit-making venture. In five years, Tata Air Mail’s profit rose from Rs 60,000 in 1933 to Rs 6 lakh in 1937.
Independence changed Tata’s relation with the government. Tata Group, in October 1947, gave a proposal to the government to float Air-India International.
The government was to hold a 49 percent stake in the Air India venture with a provision of acquiring an additional two percent stake in the company. Tatas were to have 25 percent and the rest was to be owned by the public. The proposal got the Nehru government’s approval within weeks.
Next year, Air India launched its maiden international route with a Bombay-London flight. It was on this flight that its iconic mascot Maharaja was used.
In 1953, the government paid Rs 2.8 crore to purchase the rest of Air India’s stock. The government paid another Rs 3 crore to purchase other domestic airlines making the nationalization of civil aviation complete.
Despite the nationalization of Air India, JRD Tata remained the national carrier’s chairman for over 25 years. He was removed from the position in 1978.
Air India’s first Boeing 747 plunged into the Arabian Sea off Mumbai, killing all 213 passengers and the crew on-board on January 1, 1978. The Morarji Desai government removed JRD Tata the next month, drawing newspaper headlines such as, “Unpaid Air India Chief Is Sacked by Desai”.
When Indira Gandhi came back to power in 1980, she brought back JRD Tata to the Air India’s board of directors. JRD stayed in the position till 1986, when Prime Minister Rajiv Gandhi appointed Ratan Tata as the Air India chairman. Ratan Tata remained in the chair till 1989.
(_Vinayak.Barot)
