MUMBAI: Amid intense speculation and pressure, the Cabinet will now decide if it favours an outright sale or partial divestment of the loss-making Air India.
The inter-ministerial consultations have been submitted to the Cabinet, which will now decide the way forward, said Union Minister Jayant Sinha on Tuesday. "We are going through the analysis. Those (inter-ministerial) recommendations are with the Cabinet right now and it will take the process forward," he said.
The national carrier has over Rs 52,000 crore debt, Rs 50,000 crore accumulated losses and is surviving on a Rs 30,000-crore bailout package extended by the previous UPA government in 2012.
Recently, the government think-tank Niti Aayog recommended a complete privatisation of the airline. But senior Air India officials and the aviation ministry believe the airline has enough assets to back its debt. It suggested that the government should not opt for a 'distress' sale or hand over the airline to a private player on a platter.
Speaking to media on the sidelines of an event here, Sinha said there have been a number of discussions for many months now, without disclosing specifics. "All appropriate action and in fact concerns have been discussed at the inter ministerial level and they are being summarised and presented to the Cabinet, which will take into account when it goes through that discussion process," he added.
The Cabinet note prepared by the Committee of Secretaries includes both the Niti Aayog’s recommendations and the aviation ministry’s proposal to reduce debt by sale of assets.
As per reports, the ministry estimated that at least Rs 30,000 crore worth working capital loans can be reduced through asset sale. This could lower the annual interest outgo of approximately Rs 4,500 crore or 21 per cent of its turnover. On privatisation, Sinha didn't rule out privatization but said all options were on the table.
Meanwhile, seven employee unions have written to the government opposing the ‘arbitrary and unilateral’ recommendations of privatization. They have raised concerns over job losses and even hinted that they would agitate leading to industrial unrest and disharmony, in a letter. There are a total 21,137 employees of Air India, including its subsidiaries.