The Centre is keen on finding a lasting solution for the debt-laden public sector behemoth Air India (AI), including a possible disinvestment but still needs to take a call on four major issues to decide its future, said Arvind Panagariya, vice-chairperson, NITI Aayog.
“Firstly, the government has to take a decision on whether or not to privatise (Air India),” he said.
“Assuming that the decision is made to privatise, then the issue comes what is the universe of potential buyers... is it only the national buyers or will we allow foreign entities also to bid for it,” he said on Friday while acknowledging that it will be difficult to sell the airline with its ₹52,000 crore debt burden.
The NITI Aayog had sent a set of recommendations to the Civil Aviation Ministry to examine various options for the revival of the state-owned airline, including privatisation.
Last week, Finance Minister Arun Jaitley said he had called for the disinvestment of Air India when he was in charge of the disinvestment ministry in 1999-2000. “I had said please disinvest Air India, otherwise there will be nothing left to disinvest. This was some 18 years back,” he had said.
“So, history has given us a second chance that a good investor should come, which has credibility so [that the] Civil Aviation Ministry will consider it (disinvestment),” Mr. Jaitley had said.
Stake retention
Mr. Panagariya said if the Centre decided to privatise Air India, the next issue to be resolved was whether it should retain some stake in it “however small, because there is the issue that it is a national carrier and therefore we should maintain that for national reasons.”
He agreed that the debt of the airline, which he last heard was about ₹52,000 crore is “a very very large debt and selling it with current existing debt will be very, very difficult even if the sale is open to both domestic and international buyers.”
He said something had to be done on the debt issue. “Perhaps, the question largely is whether the government writes off the entire debt or some part of it… All this needs to be discussed,” he added.
Civil Aviation Minister Ashok Gajapathi Raju had recently said that the Centre was examining all options for the revival of Air India, but it would be difficult to find a ‘bakra’ to take it over.
“There are hardly any bakras around, so to get one is difficult and businessmen are businessmen. One thing is for sure, taxpayer’s money cannot be committed for eternity.”
