The government has asked the Civil Aviation Ministry to move a proposal to the Union Cabinet for financial assistance and restructuring of the state-run carrier Air India.
The Cabinet will take a decision after consulting the finance ministry. The Committee of Secretaries (CoS) — that met on Saturday — headed by Cabinet Secretary K.M Chandrasekhar took the decision to move the proposal.
The Civil Aviation Ministry also made a presentaion before the COS on reviving the ailing national carrier.
According to sources, in its presentation the ministry said the government could make only a partial contribution as part of the equity infusion to the airline, a major part of resource mobilisation would likely to be through options like partial divestment of government equity, issuance of initial public offer or infrastructure bonds.
The CoS, however, felt that “Air India needs to adopt more aggressive cost reduction measures and examine its strategic position with respect to its shareholders objectives.”