New Delhi, The Central government on Thursday sought Parliament’s nod to infuse Rs 2,345 crore into the financially strained national carrier Air India under the airline’s ‘Turn Around Plan’.
The amount is a part of second Supplementary Demands for Grants for 2018-19 for gross additional expenditure of Rs 85,948.86 crore which was presented to the Lok Sabha by Finance Minister Arun Jaitley.
The demands, tabled by Jaitley, contain proposals involving a net cash outgo aggregate to Rs 15,069.49 crore and gross additional expenditure, matched by savings of the ministries and departments or by enhanced receipts and recoveries, aggregating Rs 70,882.21 crore.
Additionally, the government has sought the Parliament’s nod for providing Rs 1,300 ‘Grants-in-Aid General’ to Air India Asset Holding (Special Purpose Vehicle).
The development comes after the Central government had decided to transfer Air India’s debt worth Rs 29,000 crore to the SPV.
The decision was taken by an inter-ministerial panel — Air India Specific Alternate Mechanism — which has been formed to look after the divestment of the national carrier.
The move was aimed to lessen the interest payment obligation of the airline on its total outstanding debt of over Rs 50,000 crore.
In addition, the inter-ministerial panel had decided to divest the government’s stake in Air India Air Transport Services Ltd (AIATSL).
Last Month, Civil Aviation Secretary R.N. Choubey had said that the national carrier has commenced a “cost-cutting and revenue augmentation” plan to garner “financial benefits” of Rs 2,000 crore per annum.
The cost cutting and revenue augmentation plan was recently implemented by the airline.
Prior to the current move, the government had offered to sell 76 per cent stake in Air India. However, the state-owned carrier, which has accumulated losses of over Rs 48,000 crore, failed to attract any bidder.
On May 31, the Ministry of Civil Aviation said that “no response” was received even during the extended submission deadline for the EOI bids under Air India’s divestment process and the “further course of action will be decided appropriately”.