The Centre may clear Rs 25,000 crore debt while 51% or more of the airline’s stake could be sold to a private entity .
New Delhi: National carrier Air India appears to be inching towards privatisation, with the Cabinet expected to take a final decision eventually on the airline’s fate.
Top government sources said recently that a major issue under consideration is the Rs 50,000 crore debt that the airline is reeling under, due to factors such as loans taken a decade ago when scores of aircraft were ordered.
Sources said finance minister Arun Jaitley is expected to take a final view on how much of the debt the Government will shoulder by waiving it off. Speculation is rife that about Rs 25,000 crore debt could be waived off by the government, which will then have to shoulder that burden.
Top sources said that 51 per cent or more of the airline’s stake could be sold to a private entity, which means the airline has to be privatised. Another option is that the government allows Air India to remain a national carrier by controlling at least 51 per cent stake. Currently, the government owns the career with 100 per cent stake in it.
Sources indicated that consultations are on and that once the final decision would be taken, the proposal would be placed before the Cabinet for clearance. The Centre is also examining the recommendations of Niti Aayog to make Air India a “strong and viable” airline. Air India has incurred losses worth thousands of crores but is surviving based on a government bailout package of Rs 30,000 crore that began during the UPA-2 government tenure, continuing under the current NDA government. But this figure could go up to even Rs 50,000 crore in the next five years, with sources saying the government has already infused an equity of about Rs 25,000 crore into Air India in the past five years. Air India has a debt burden of about Rs 50,000 crore.