During my travels in India, I was told the following story by a co passenger of mine who happened to be working for IC
The Government of India liberalized its civil aviation policy in the 1980s, allowing private people to start airlines. Many Airlines , notably East west, Dhamania, Jet air and Modiluft started operations, all flying B737-200s.
The idea behind these airlines going for B737-200s was that they could "poach" trained engineers and pilots from IC
by offering higher salaries.
Many of these people therefore, lured by the higher pay, quit IC
and joined these private airlines.
Soon these private airlines realized the difficulties of operating in India's (then) rather limited domestic market and ran into losses. All of them (wth the exception of Jet Airways) soon closed down. The pilots and engineers who had joined these carriers were out of jobs.
The Government of India (in a rather nice gesture) then decided to save the careers of these people by starting a new airline and hiring them. Alliance air thus came into being.
Maybe the better informed Indians here can confirm this.
Never argue with idiots. They will bring you down to their level, and beat you with experience.