New Delhi: Air India got a breather on Thursday after the government cleared a cash infusion of Rs800 crore for it. The infusion is part of a Rs5,000 crore government support package the airline is to receive if it implements enough cost-cutting measures.
As part of those measures, Air India indicated it plans to cut its fleet of 146 aircraft to just 105 aircraft by March 2011. But it’s still falling behind in its other efforts to streamline its operations. Air India had planned a cost cutting of Rs1,911 crore in 2009 to 2010, but as of last month it had only reduced Rs751 crore in costs.
The petroleum ministry plans to put up fewer oil exploration blocks for bidding during its next round of auctions. For the coming round of the Nelp auctions it intends to only offer blocks that have a higher hydrocarbon reserve and are likely to attract more bidders. During the earlier eighth round of Nelp, the government received bids for just 36 of the 70 blocks it offered.
Also in the energy industry, the government remains divided over how to protect India’s manufacturers of power generation equipment from Chinese competition. While the Planning Commission has recommended a 14% import duty on all foreign manufacturers, it’s facing opposition from the power ministry, which says domestic equipment cannot meet current demand. At present, the government does not levy any duty on power generation equipment imported for thermal power projects of over 1,000 MW, but it imposes a 5% duty on foreign equipment for smaller projects.
Food inflation has risen for a fourth consecutive week. The food price index rose 17.97% in the week ending 6 February compared to a year earlier. The index had gone up 17.94% in the previous week.