NEW DELHI: In a bid to revive the debt-ridden national carrier, the government on Tuesday sought Parliament’s approval for Rs 980 crore as supplementary grant for equity infusion in Air India.
According to the document tabled in the Lok Sabha, the Civil Aviation Ministry has sought the grant for 2018-19 under the Turnaround Plan (TAP).
The government has sought a token provision of Rs 1.02 crore for enabling re-appropriation of savings in cases of new service or new instrument of service.
The amount is part of the total gross additional expenditure of Rs 11,697.92 crore, for which approval has been sought from the Parliament.
Recently, the ministry had reaffirmed in Parliament that it remained committed to the disinvestment of Air India. The proposed strategic stake sale in the carrier had failed to take off in May as it failed to attract any buyer.
According to information from the ministry, Air India has received equity infusion worth Rs 27,195.21 crore under TAP and Financial Restructuring Plan (FRP) approved back in 2012. In the current financial year, the State-owned airline received an equity infusion of Rs 650 crore up to June.
The UPA government had in 2012 approved TAP and FRP for Air India. All government guaranteed loans and interests thereon are being paid by the government by way of equity infusion into the airline. Under FRP, high cost of working capital loans have been converted into long-term debt carrying lesser rates of interest so as to reduce the financial burden on Air India.