Next fiscal, Air India to get Rs 650 cr under turnaround plan
Disinvestment-bound Air India will receive only Rs 650 crore under the government’s turnaround plan in the next financial year, less than half of the amount allocated in the current fiscal.india Updated: Feb 01, 2018 20:34 IST
Disinvestment-bound Air India will receive only Rs 650 crore under the government’s turnaround plan in the next financial year, less than half of the amount allocated in the current fiscal.
The lower allocation for the ailing carrier in the Budget 2018-19 that was presented today also comes at a time when the stake sale process is on.
The debt-laden airline is staying afloat on taxpayers’ money under a turnaround plan approved by the previous UPA regime in 2012.
For 2018-19, Air India has been allocated Rs 650 crore compared to Rs 1,800 crore given for the 2017-18 period, according to a budget document.
As part of a turnaround plan, the national carrier is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds over a ten-year period starting from 2012.
The airline has already received more than Rs 26,000 crore under the package.
As per the budget document, an amount of Rs 506 crore is to come for Air India in the next fiscal by way of IEBR (Internal and Extra Budgetary Resources) in the next financial year.
IEBR refers to a company raising funds through internal resources and external borrowings.
In June 2017, the Cabinet Committee on Economic Affairs (CCEA) gave its in-principle nod to the strategic disinvestment of the airline -- which has a debt burden of more than Rs 50,000 crore.
A ministerial group is now working on the disinvestment modalities, including treatment of Air India’s unsustainable debt, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profit-making subsidiaries.