New Delhi, June 28 The Union Cabinet today accorded “in-principle” approval to divest the government stake in the debt-ridden national carrier Air India. The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, who returned from his three-nation tour only this afternoon. The Cabinet approval comes about two months after the PM gave the go-ahead for disinvestment in the airline, which has accumulated losses of more than Rs 50,000 crore, besides a debt of around Rs 55,000 crore.
Finance and Defence Minister Arun Jaitley said, “The Union Cabinet has accepted the proposal of the Civil Aviation Ministry for disinvestment in Air India.” It also accepted a proposal to set up a committee under the Finance Minister to work out modalities for the disinvestment, he added. Once the modalities were finalised, the proposal would go back to the Union Cabinet for taking a final call. Jaitley said, “The Civil Aviation Ministry had made a request that the Finance Minister should head the group. The Group of Ministers would decide on the quantum of disinvestment, mechanism of divestment, assets and debt of Air India and hotel companies owned by Air India.” On the timeline for setting up the group for divesting stake in the airline, he said, “In this government, the groups are set up very fast… The PM will decide the group’s composition, only the chairman has been decided today.” The committee of ministers would now start the process of valuation of the airline, decide upon the eligibility of buyers, identify prospective suitors, decide upon the method of sale and what to do with the airline’s assets and its debt, dealing with employee unions, and hiring financial and legal advisers for the sale.