Air India’s Privatisation Tough Without Some Debt Writeoff: Arvind Panagariya
Any attempt to privatise troubled state-owned Air India must be preceded by the government writing off at least a part of the the airline's debt, Arvind Panagariya, the vice-chairman of government think tank NITI Aayog told reporters on Friday.
The airline is paying a significant sum as interest payment, which is unsustainable for the government, Panagariya added.
Right now, we are considering sale of Air India...airline has a large debt of over Rs 50,000 crore that attracts more than Rs 4,000 crore in interest payments and there is a large net loss. This is the issue.Arvind Panagariya, Vice-Chairman, NITI Aayog
A decision needs to be taken on the fate of its real estate and other non-core assets before privatising the airline, according to the NITI Aayog head. If the government decides to take the privatisation route, it needs to take a call on whether the bid will be open to national buyers or international buyers and whether it will maintain some stake in the airline.
In a recent report to the Civil Aviation Ministry, the NITI Aayog has recommended strategic disinvestment from the loss-making Air India, by which government control would be transferred to a private owner. The airline is saddled with a debt of Rs 50,000 crore and is surviving on a taxpayer bailout.
The options include asking the potential buyer to absorb loans of about Rs 20,000 crore linked to aircraft purchases and disposing of the carrier's real-estate and other non-core assets before the sale, Bloomberg reported citing people who asked not to be identified as the discussions are private.
Also Read: Debt Recast To Be An Important Component of Air India's Turnaround, Aviation Secretary Says
Strategic Sales To Pick Up Pace
Strategic divestments in state-owned companies, which has moved slower than expected, is expected to pick up pace, Panagariya said.
Strategic stake sale refers to divestments where government will bring down its holding to 50 percent.
Stake sales in about 20 public sector companies have been approved by the Union Cabinet and the Department of Investments and Public Asset Management is working on it will now take a call to take these divestments forward, Panagariya said. The government is considering reducing its stake in all these 20 companies below 51 percent.
In the previous financial year, the government had lowered the budgeted target of strategic stake sale to Rs 5,500 crore from Rs 20,500 crore.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.
-
'Never Seen This Level Of Negativity': Sandeep Tandon Says The Next Rally May Be Closer Than You Think
Veteran investor Sandeep Tandon says foreign selling is easing, large-caps are due a comeback and mid-caps are crowded, while he turns positive on gold, power and pharma this Diwali.
