Wednesday, May 17, 2017

Govt tells NITI Aayog to draw a road map for ailing Air India

Amid the dilemma over spending Rs 50,000 crore on health, education or airline, the government has tasked NITI Aayog to devise a road map for ailing Air India, which may include recommendation for a strategic sale.

The latest push to set the house in order in the beleaguered state carrier has been spearheaded from the top.

Sources said the NITI Aayog is looking at various options and will submit its recommendations in the next few weeks after which the government will take a final call on the way forward.

This is the most serious effort being launched by the Modi government to tackle the mess in Air India. The then Vajpayee government had jump-started efforts to sell a stake in Air India and the then disinvestment minister Arun Shourie had promised to push ahead with a strategic sale even if one bidder was in the fray. But ultimately, the plans fell through and Air India continued as a state-run entity.

"Why should we continue to put thousands of crores in Air India when we can utilise the money for several social sector projects," said an official, who did not wish to be identified.

Estimates suggested that the airline has liabilities of over Rs 52,000 crore, with the interest burden alone estimated at Rs 4,000 crore annually. While Rs 25,000 crore has been pumped in over the last five years, a similar amount has been committed till 2032 but still Air India will have an annual cash deficit of Rs 3,000 crore.
17/05/17 Surojit Gupta & Sidhartha/Times of India

0 Comments: