New Delhi, June 5 Making a strong case for disinvestment of Air India, Finance Minister Arun Jaitley on Monday said the government should have exited the airline more than a decade ago.
The minister asked why should the tax-payer’s money worth Rs 55,000-60,000 crore be invested to save the debt-ridden airline.
“Civil aviation is turning into a good success story in India… we have a lot of private sector players running very efficient airlines in India,” Jaitley told CNBC TV18 in an interview.
“Therefore, how fair is it for the government to occupy 14 per cent of the market share and then say some Rs 55,000-60,000 crore of tax-payer’s money must get into this whole process.”
According to the minister, the government should have exited the airline more than a decade-and-half ago.
“I do see a great future for the aviation sector… if private sector players come, participate in Air India’s proposed privatisation scheme, I think it will add to competition and add to quality, at what pace it will be done, in what manner it will be done is really for the civil aviation ministry to decide,” the minister said.
Replying to a question on the government’s ability to find a buyer for Air India without being able to write off a significant portion of its debt, Jaitley said: “I think the debt itself will have multiple components.”
“The debt has a component which is the assets itself, which is the aircrafts. Then there are routes, then there is a lot of immovable property and out of the rest which is the government’s responsibility, let us see what the Civil Aviation ministry decides and the government will then take a collective view.”
On last Friday, government think-tank NITI Aayog had said that settling Air India’s Rs 52,000 crore debt will be a “very difficult affair”.
“Something has to be done on the debt issue… Whether the government writes off part of the debt or not,” NITI Aayog Vice Chairman Arvind Panagariya had said.
“The government needs to resolve four big issues in Air India’s strategic disinvestment… Whether or not to privatise, and, if yes, then what is the universe of potential buyers… Whether even foreign buyers can bid.”
Besides the huge debt, Panagariya said the government also would need to consider whether to retain some stake in Air India since it is the national carrier.
In a recent report to the Civil Aviation Ministry, the NITI Aayog recommended strategic disinvestment from the loss-making Air India, by which government control would be transferred to a private owner.
On May 30, Civil Aviation Minister Ashok Gajapathi Raju said several options and alternatives are available for restoring the financial health of the national passenger carrier.
Raju had informed that the NITI Aayog has already submitted several suggestions to restore the financial health of the national passenger carrier and these are being examined.