Finmin against infusing funds into AI

New Delhi: There's bad news for cash-strapped Air India. The finance ministry is not in favour of giving Rs 1,200 crore —— the second tranche of the Rs 2,000 crore (of which Rs 800 crore was given last fiscal) —— to the struggling airline. Reason: AI's failure to prune its annual wage bill of Rs 3,600 crore.
In a note sent to the aviation ministry, the finance ministry has expressed dissatisfaction with AI on several fronts and said that appointing independent directors is the only milestone that has been achieved. Hence, the finance ministry will be unable to recommend release of this amount. While wage reduction has not happened, AI has recently gone in for some big ticket appointments with annual packages running into several lakhs and even in crores at COO level .
The aviation ministry top brass, however, said the Rs 2,000-crore fund for AI was a "done deal". "We are going to the Cabinet Committee of Economic Affairs (CCEA) this month for getting Rs 1,200 crore. While the finance ministry has rightly pointed out that wages have not been cut, this issue is so hot that the Group of Ministers on AI itself recommended that the issue of wage renegotiation should first be approved by the CCEA. Also how can the management justify wage cut for employees when it has gone in for big ticket recruitments," said a senior aviation ministry official.
10/11/10 Times of India

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Categories: Air India Nov 2010