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Cabinet clears Air India disinvestment
The Union Cabinet on Wednesday cleared disinvestment of debt-laden Air India (AI), but the final modalities, including the quantum of stake sale, will be decided by a Group of Ministers (GoM).Finance Minister Arun Jaitley said: “The Cabinet has given ‘in-principle’ approval for disinvestment of Air India.
New Delhi: The Union Cabinet on Wednesday cleared disinvestment of debt-laden Air India (AI), but the final modalities, including the quantum of stake sale, will be decided by a Group of Ministers (GoM).Finance Minister Arun Jaitley said: “The Cabinet has given ‘in-principle’ approval for disinvestment of Air India.
Air Lock:
- Total debt at Rupees 52K crore
- Staying afloat on a Rupees 30K crore bailout
- A GoM will finalise modalities on disinvestment
- Union demands for waiving Rupees 30,000-crore debt
A group will be set up to finalise modalities/details of disinvestment of Air India, including the quantum of stake sale. Prime Minister will decide members of the Panel.”The civil aviation ministry is charting out the disinvestment of the state-run carrier.
Surviving on taxpayers’ money, Air India has been in the red for long and various proposals, including government think tank NITI Aayog’s suggestion for complete privatisation, have been made. The airline has a debt of over Rs 52,000 crore and is surviving on a Rs 30,000-crore bailout package extended by the previous UPA government in 2012.
The Civil Aviation Ministry’s proposal for formation of a group under the chairmanship of the Finance Minister to decide the modalities of divestment process has also been accepted.However, the minister didn’t divulge any time frame for the formation of the group or the submission of a final report by the panel which will be formed to look at the quantum of stakesale.
On June 20, Minister of State for Civil Aviation Jayant Sinha had said that the NITI Aayog’s recommendation on the future of the national passenger carrier has been presented to the Union cabinet which will take a call on it. Sinha had said that inter-ministerial consultations on the future of the airline have been completed and were being summarised and presented to the Cabinet.
Waive Air India's debt, pleads union
Air India Employees’ Union, which represents 25,000 employees, on Wednesday met NITI Aayog chairman Arvind Panagriya and demanded that the government waive the airline’s debt, instead of selling it to a private player.
However, the move may have come a little too late as hours later the Union Cabinet gave its in-principle approval for the disinvestment of Air India. NITI Aayog, the government think tank, had earlier proposed privatisation of Air India because of its debt of Rs 52,000 crore.
