New Delhi: A Group of Ministers (GoM) on Wednesday night decided to grant Rs5,000 crore — Rs2,000 crore as equity infusion and Rs3,000 crore for debt clearance — for the national carrier Air India’s revival. The government equity will be Rs2,145 crore now, less than what was demanded by the employees.
The GoM was given a presentation by the national carrier’s CMD Arvind Jadhav on a financial restructuring and turnaround programme for short, medium and long terms.
Cash-strapped National Aviation Co. of India Ltd, or Nacil, which runs the state-owned airline, may get the money earlier because of pressure from lawmakers, according to a member of the parliamentary standing committee on transport, tourism and culture, on condition of anonymity.
The national carrier, saddled with cumulative losses of Rs7,226 crore in the 2008 and 2009 fiscal years and awaiting a government bailout, was supposed to receive its first tranche of Rs2,000 crore out of a total Rs5,000 crore by late December or early January.
Air India’s borrowings shot up to Rs15,241 crore at the end of June, up from Rs6,550 crore in November 2007 and the airline had asked the government for a loan and equity infusion of around Rs15,000 crore.
In a 25 July meeting, the committee of secretaries had suggested Nacil prepare a cost-reduction proposal, to justify an equity infusion or any soft loan grant.