Representative image

NEW DELHI: The government on Wednesday gave an in-principle approval to the disinvestment of Air India , Finance Minister Arun Jaitley announced after a Cabinet meeting. A Group of Ministers (GoM) will be formed to look into the disinvestment which will decide on the quantum of disinvestment, he said.

“Disinvestment is always the art of the possible. We will do so now also. Individual units can go in the direction of privatisation. There is a possibility. Some have been identified,” Jaitley had said last month.

The Tata Group in partnership with Singapore Airlines is interested in buying India's national carrier Air India from the government, a report last week said.

Read this story in Marathi

NITI Aayog, the government's think tank has suggested complete privatisation of the Air India, which has a debt burden of over Rs 52,000 crore.

The Ministry of Civil Aviation has been looking at ways to revive Air India, which is surviving on Rs 30,000 crore bailout package extended by the previous UPA (United Progressive Alliance) regime.

The Cabinet chose between two options suggested in a 30-page note prepared by the Department of Investment and Public Asset Management (DIPAM) after discussions in a Committee of Secretaries, headed by the Cabinet Secretary. The discussions were on both the NITI Aayog’s recommendation of complete privatisation and the civil aviation ministry’s proposal of a substantial reduction in the airline’s debt by sale of subsidiaries and assets before privatisation.

The Cabinet note prepared by the Committee of Secretaries included both the NITI Aayog’s recommendation of complete privatisation and the civil aviation ministry’s proposal of a substantial reduction in the airline’s debt by sale of subsidiaries and assets before privatisation.

The proposal by the government’s think tank, is based on studies of revival of various international airlines in which governments exited fully.

Prime Minister Narendra Modi's administration has been exploring ways to privatise the loss-making national carrier, which was bailed out in 2012 with

Rs 30,000 crore of government funding.

Earlier this month, seven unions of Air India employees warned of large scale protests if the government went ahead with privatisation of the airline.

Air India has the largest domestic and long-haul fleet of 140 planes in the country and flies to nearly 41 international and 72 domestic destinations.

The airline is the single biggest international carrier from India with a 17 per cent market share. It also controls 14.6 per cent of the domestic passenger market which has eroded over time as private airlines expanded capacity.



In Video: Cabinet approves disinvestment of Air India