After several years of loss, Cabinet clears Air India disinvestment
Source :News Bharati English   Date :29-Jun-2017

New Delhi, June 29: Air India is going through tough struggle and faced a huge amount of loss in recent times. Yesterday, a cabinet meeting was held to discuss on the issue of disinvestment of Air India. Air India has reported at least 7 years of losses. Hence cabinet gave in principle’ approval for disinvestment of Air India and five of its subsidiaries. Finance Minister Arun Jaitley announced it after the cabinet meeting.

"The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval to fourth tranche recommendations of NITI Aayog on strategic disinvestment of CPSE (strategic disinvestment of Air India and five of its subsidiaries) based on the recommendations of Core Group of Secretaries on Disinvestment (CGD)," he said. Though he announced the in principle approval, he did not announce the decision if it is an outright sale or partial disinvestment.

An Air India-specific Alternative Mechanism will also be constituted. Minister of finance and Minister of Civil Aviation will head the committee to guide the process on strategic disinvestment from time to time.

The following issues will be discussed:

  1. Treatment of unsustainable debt of Air India;
  2. Hiving off of certain assets to a shell company;
  3. Demerger and strategic disinvestment of three profit-making subsidiaries;
  4. The quantum of disinvestment; and
  5. The universe of bidders.