The Union cabinet is likely to give the go-ahead for stake sale in Air India, said a report in the Economic Times. The cabinet note prepared by the Committee of Secretaries includes both the NITI Aayog’s recommendation of complete privatisation and the Civil Aviation Ministry’s proposal for a substantial reduction in the airline’s debt by sale of subsidiaries and assets before privatisation.
“The proposal gives an option and leaves it to the cabinet to decide,” a senior Aviation Ministry official told the Economic Times. It was expected to be cleared last week, but could not be taken up by the cabinet, he added.
This development comes soon after Prime Minister Narendra Modi gave the green signal for disinvestment in the airline, which has accumulated losses of more than Rs 50,000 crore and has a debt of about Rs 55,000 crore.
The proposal is based on a detailed study of revival of various international airlines, such as British Airways, Japan Airlines and Austrian Airlines, where governments gave up their share and exited from the business.
The deb-ridden airline has managed to remain operational, thanks to a Rs 30,231-crore nine-year bailout programme, originally approved by the United Progressive Alliance government led by Manmohan Singh in 2012.