The Union Cabinet has given in-principle approval to the Civil Aviation Ministry’s proposal to divest a stake in Air India, said Finance Minister Arun Jaitley, adding that a Group of Ministers will now look into the quantum, mechanism, debt and other issues of disinvestment.
The Cabinet nod is based on the Niti Aayog recommendations on disinvestment of Air India and five of its subsidiaries.
The think tank has suggested constitution of an Air India-specific Alternative Mechanism headed by the Finance Minister, and including the Civil Aviation and other ministers.
The committee will look at issues such as treatment of Air India’s unsustainable debt, hiving off certain assets to a shell company, de-merger and strategic disinvestment of three profit-making subsidiaries, the quantum of divestment and the universe of bidders.
Asked for a timeline for setting up of the ministerial group, Jaitley said: “In this government, the groups are set up very fast…The Prime Minister will decide the composition of the group, only the chairman has been decided today.”
The recommendations of the group will have to be approved by the Cabinet, he added.
Air India has a debt of ₹52,000 crore, of which ₹20,000 crore is aircraft-related and ₹32,000 crore is working-capital based.