AI sell-off discussed at cabinet meet
Even as the Centre approved another plan to ease the financial burden of the ailing Air India (AI), suggestions that it should consider a partial sale of the national carrier cropped up during Thursday’s meeting of the cabinet committee on economic affairs. Saubhadra Chatterji reports. Rs. 30,000 cr to keep Air India in airdelhi Updated: Apr 13, 2012 13:49 IST
Even as the Centre approved another plan to ease the financial burden of the ailing Air India (AI), suggestions that it should consider a partial sale of the national carrier cropped up during Thursday’s meeting of the cabinet committee on economic affairs.
Government sources told HT that Planning Commission deputy chairperson Montek Singh Ahluwalia had reportedly favoured finding a private investor for the airline. Ahluwalia also termed AI as a fit case for disinvestment.
Though civil aviation minister Ajit Singh did not oppose the suggestion, he said that the bail-out package was essential for making AI lucrative to potential buyers. He pointed out that the airline, which suffers a daily loss of Rs 10 crore, may not attract private partners in its current state.
It was also pointed out that AI would “benefit” if the government amends its foreign direct investment (FDI) policy, and allows foreign carriers to pick up to 49% stake in domestic airlines.
The 49% FDI proposal for airlines was not in the cabinet’s agenda on Thursday. However, several senior ministers – including finance minister Pranab Mukherjee, home minister P Chidambaram, road minister Kamal Nath, agriculture minister Sharad Pawar and commerce & industry minister Anand Sharma – lent their support to the proposal in advance. Prime Minister Manmohan Singh did not voice his opinion on the subject.
The civil aviation ministry will pilot the proposal in the next cabinet meeting.