Cabinet nod to in-principle divestment of Air India stake

Air India disinvestment: Prime Minister Narendra Modi's administration has been exploring ways to privatise the loss-making national carrier, which was bailed out in 2012 with $5.8 billion of federal funding.

By: Express Web Desk | New Delhi | Updated: June 28, 2017 7:36 pm
Air India, air india disinvesntment, AI, arun jaitley Air India disinvestment: The cabinet has given an “in-principle” approval for the stake sale.

The Union Cabinet on Wednesday gave in-principle approval for Air India stake divestment, Finance Minister Arun Jaitley said. “In-principle approval for Air India divestment has been given. The Civil Aviation Ministry’s proposal for formation of a group under the chairmanship of the Finance Minister to decide the modalities of divestment process has also been accepted,” he said after the meeting of Union Cabinet.

“The Civil Aviation Ministry’s proposal for formation of a group under the chairmanship of the Finance Minister to decide the modalities of divestment process has also been accepted,” said Jaitley.

However, the minister did not divulge any time frame for the formation of the group or the submission of a final report by the panel which will be formed to look at the quantum of stakesale. Jaitley said that the members of the panel will be decided by the Prime Minister.

Prime Minister Narendra Modi’s administration has been exploring ways to privatise the loss-making national carrier, which was bailed out in 2012 with $5.8 billion of federal funding.

On June 20, Minister of State for Civil Aviation Jayant Sinha had said that the NITI Aayog’s recommendation on the future of the national passenger carrier has been presented to the Union cabinet which will take a call on it. Sinha that time had said that inter-ministerial consultations on the future of the airline have been completed and “are being summarised and presented” to the cabinet.

In a recent report to the Civil Aviation Ministry, the NITI Aayog recommended strategic disinvestment in the loss-making Air India, by which government control would be transferred to a private owner.

The cabinet also approved the recommendations of the 7th Pay Commission on allowances. The revised rates will be effective from July 1.

(With inputs from agencies)

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  1. C
    C S
    Jun 29, 2017 at 6:48 am
    Air India is not the lone loss making PSU there are several others like, BSNL, MTNL, ITI, HPF etc, all making huge losses. Some of them produce nothing and yet the employees were paid full wages. While a King Fisher Airlines could get away without paying its employees a govt company can't and that is the reality. Loss making or not, even the pay commission benefits, by and large, will have to be extended to the PSUs. Having said that, it was always the national carrier that stood by in rescuing Indians st ed in the war zones as in the big airlift during the Kuwait war. Also, part of its losses could be attributed to flying in uneconomic routes for connectivity to remote areas. In any case, no private party would take over the huge employee cost and loan burden. It was better to start privatisation with smaller loss making PSUs before Air India.
    Reply
    1. K
      Kulaputra
      Jun 29, 2017 at 6:17 am
      If Air india is back with TATAs, then let us bring back Ajit Wadekar as the Indian cricket team coach. At least he had lady luck with him always.
      Reply
      1. V
        V. Setty
        Jun 29, 2017 at 4:11 am
        In terms of service both at the counters and in the aircraft as well as other amenities, Air India has got to be the worst airline in the world, worse than all US flag carriers. Whether they are efficient or not, they are always bailed out. So sell it for a rupee, then you at least save the annual bail out costs.
        Reply
        1. D
          Deshu
          Jun 29, 2017 at 4:00 am
          It is welcome move of Modi govt to disinvest Air India which is known as an white Elephant for exchequer's money. Everyone knows Air India of JRD Tata was made a Beggar due to political interference in its administration.No doubt Air India's Union and so called Left Parties including Congress party will oppose it not because of love but they are losing power to control AI.AI's name was spoiled by Politicians who treat it their own property.
          Reply
          1. K
            KSRao
            Jun 28, 2017 at 11:21 pm
            Disinvestment in Air India should happen quickly both for its own survival and growth as also in the interests of the country.
            Reply
            1. S
              Smart
              Jun 28, 2017 at 10:38 pm
              Good decision to divest this sick elephant. Let this be managed in a more efficient way by more competent players in the market. This is no longer a national airlines but a national liability.
              Reply
              1. M
                Monalisa Dash
                Jun 28, 2017 at 10:37 pm
                minimum govt and maximum governance is the goal of NDA govt and it is trying to prove thats in every of its works
                Reply
                1. V
                  Vish Ontoor
                  Jun 28, 2017 at 9:48 pm
                  Only in India: half the country s on the road, have/will never travel on a flight in their life, but still, pay direct/indirect taxes to prop up Air India for rich Indians to fly on it. Jai ho! And btw, the same people will cry the most on disinvestment of the airline. After all, a "national jewel" is being sold. LOL. Grow up India! At least, now realize where your money is going to.
                  Reply
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