Air India Divestment Plan to Help Government in Ramping Up Other Sectors

One of the prime things in the agenda for the Indian government happens to be the sale of Air India. The government is already working to put Air India for sale. However, as per a new report by Hindu Business Line, the government is pushing the sale of Air India because it wants to bring reform to the domestic aviation sector in lieu of the Air India sale. 

Government to Put Money to Better Use

A person aware of the matter remarked about the step being taken by the government, “The Government has done a lot to involve the private sector in the domestic airport sector. This experiment has helped provide funds which have been used for development of other airports.” 

The divestment of Air India will help the government in generating funds for all the other areas where it could be pumping money. As per the source, the money generated will be used to develop other sectors which are on priority. Until now, the government was pumping massive amounts of money into the loss making airline. 

Air India’s Loss Making Past

As told by Civil Aviation Minister Hardeep Singh Puri, the government had invested Rs 5,780 crore in to Air India in 2014-15, and then it invested Rs 3,300 crore in 2015-16, and then Rs 2,465.21 crore in 2016-17, followed by another Rs 1,800 crore in 2017-18 and another Rs 3,975 crore in 2018-19. However, despite such heavy investments, Air India continued to make losses year on year that widened over time.

Government Sweetening the Deal for Buyers

To recall, last time the government had made the mistake of retaining a stake in the airline while trying to sell it thus scaring away the buyers. But, this time, the entire stake of the government will be put up for sale during the privatisation process. Not only this, but to make the deal attractive for the buyer, some of the airline’s liabilities have been taken care of by the government. For example, out of the total Rs 82,000 crore which the airline is liable for, the government has taken care of Rs 29,400 crore. 

Arpit Sharma

Whenever Arpit boards a plane he is filled with awe and bewilderment and soaring above the skies is something marvellous for him. An aviation and tech geek through and through Arpit writes at AviationScoop not only because he's experienced and good at his craft but also because flying is something which makes his heart flutter with joy.

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Arpit Sharma

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