Home / Companies / News /  Deepak Parekh, Narayana Murthy may be part of expert panel on Air India

New Delhi: The aviation ministry has shortlisted the names of half-a-dozen people, including Infosys Ltd co-founder N.R. Narayana Murthy and Housing Development Finance Corp. Ltd (HDFC) chairman Deepak Parekh, to be part of an expert panel on Air India Ltd.

Besides Murthy and Parekh, the panel will have people with aviation and regulatory expertise, according to two people familiar with the development who asked not to be named.

The other members could include a former Air India chairman, a former aviation secretary, and a former chief of the Securities and Exchange Board of India (Sebi), the two people added.

“They will show the roadmap for the airline. The panel will be announced soon after consultations with the prime minister," said one of the two.

Murthy said he hasn’t heard anything to the effect. “I am in London right now and have not heard from anybody on this issue," he said in an email.

Parekh declined comment.

On 22 February, news agency Press Trust of India reported Parekh as saying that the divestment of the government’s stake in insurer Life Insurance Corp. of India, Air India, and telecom company Bharat Sanchar Nigam Ltd could unlock “lakhs of crores of rupees" and shares should be sold to retail investors without depending on interest from overseas entities .

On 18 February, Parekh had said that while everyone knew this government meant well, there had been no improvement in the ease of doing business nine months after it came to power.

This had led the government to vehemently defend itself.

Power minister Piyush Goyal, in an interview with CNBC-TV18 on 19 February, said “a lot of action is happening on the ground".

“The shares of Deepak Parekh’s companies—HDFC and HDFC Bank—have been doing very well, and that is possible only when the business and the economy does well," Goyal said.

The second person familiar with the matter said that in the background of this controversy, the aviation ministry is “treading cautiously" when it comes to Parekh, but that “he has very sound knowledge on the subject and will be an asset to the airline".

Aviation minister Ashok Gajapathi Raju, who is mulling over the names before seeking Narendra Modi’s approval, told Parliament on 24 February that “setting up of an expert committee to suggest ways to further improve the performance of Air India is under consideration".

In April 2012, the government approved a turnaround and financial restructuring plan for the carrier and is infusing 30,231 crore till 2021, provided the airline meets certain milestones.

“Air India has considerably improved its financial and operational performance," the minister said in a written reply to the Rajya Sabha but added there was “at present, no proposal for privatization of Air India is under consideration of the government".

The aviation ministry told the Rajya Sabha on Tuesday that Air India’s losses after tax for 2013-14 are being revised upwards to 6,279.60 crore.

The ministry had told Rajya Sabha on 8 July last year that the net loss of Air India marginally decreased to 5,388.82 crore in 2013-14 from 5490.16 crore in 2012-13.

This is not the first time the government has tried to tap private sector expertise for Air India. In 2010, the then United Progressive Alliance government appointed Anand Mahindra, chairman and managing director of the Mahindra Group, as an independent director of the Air India board. Mahindra resigned the following year from the board saying his company was strengthening its focus on aerospace components and he didn’t want a possible conflict of interest.

“The carrier should be restructured and privatized with the freedom to seek a viable airline partner as part of the privatization," consulting firm Capa Centre for Aviation said in its recommendation to the aviation ministry last year, adding that a council to decide on the airline’s future should be created with the objective of exploring the mechanics of such privatization.

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