Chennai: Finance Minister Arun Jaitley sought additional grant of over Rs 2,300 crore from the Parliament to be infused as equity in debt-laden Air India.
Jaitley tabled second round of supplementary grants for 2018-19 in Rajya Sabha and sought Rs 2,345 crore as equity infusion coupled with Rs 1,300 crore as grant-in-aid for the national carrier.
According to figures from Air India, government has already infused close to Rs 1,600 crore as equity infusion during FY19. The government was planning further financial assistance for Air India.
Experts state the move suggests that the government has accepted defeat as the process of privatising the carrier failed to generate interest among private parties.
Thus, changing its course, the government under its current revival plan has decided to sell non-core businesses through a special purpose vehicle (SPV).
According to the plan, the government will transfer debt worth Rs 30,000 crore from the airline to the SPV, which will be recovered by selling its non-core real estate assets.
Currently, the State carrier has debt worth Rs 55,000 crore and accumulated losses close to Rs 30,000 crore. After the transfer, Air India will have Rs 26,000 crore as debt on its books of accounts.