Govt to give Rs 80 cr grant to Air India

According to officials, the government has made it clear that the state-owned airline has to improve its performance if it is looking out for more grants from the former

GN Bureau | December 21, 2016


#PSU   #Air India   #debt   #ministry of civil aviation  

 

National carrier Air India will get only Rs 80 crore as additional budget support in the current financial year from the government – much below its demand of Rs 2,200 crore, reported The Business Standard.

The government has agreed to release a ‘meagre’ grant despite the fact Air India’s chairman and managing director Ashwani Lohani had written to the former that funds crunch might derail the turnaround process of the state-run airline.

“Civil aviation ministry’s concerns over requisite funds were accepted by the finance ministry but the latter expressed its inability to accept the full demand,” the newspaper quoted a civil aviation ministry official.

According to AI officials, though, the Rs 80 crore being offered is too negligible an amount to be invested in an airline. The government has made it clear that the state-owned airline has to improve its performance if it is looking out for more grants from the former.

“The money comes from the Consolidated Fund of India. Every company has to show some performance to get more funding,” said an official.

The newspaper further reported that Lohani had written to the civil aviation ministry in November saying that because of the airline’s huge debt burden, a reduced equity infusion would put the airline’s expansion plan in jeopardy.

He underlined that the airline would be forced to raise temporary loans from the banks to bridge the liquidity gap, thus endangering the liquidity and survival of the company.

Air India has debt of Rs 46,000 crore and has annual interest outgo of around Rs 4,000 crore, the report said.

 

Comments

 

Other News

Bank loan recovery in recent years has mirrored Hindu rate of growth

At the outset, for those who are not familiar with the nomenclature ‘Hindu Rate of Growth’, it refers to the low economic growth in post-independent India till the 1990s, when several economic liberalisation measures were undertaken. Till the 1990s, the growth rate was around 4%, which accelera

“Indian Navy needs more capabilities to build ships”

As India faces increasing threats from China and Pakistan on sea, Vice Admiral Ajendra Bahadur Singh, Flag Officer Commanding-in-chief (FOC-in-C), Western Naval Command, has said that the Indian Navy needs to scale up its capabilities and have more budgets allocated. Speaking to members of t

Mumbai issues strict guidelines for home quarantine of all international passengers

In view of the emerging threat of the new coronavirus variant, Omicron, the BrihanMumbai municipal corporation (BMC) Saturday issued strict guidelines for surveillance of all international travellers arriving in the metro and especially those from ‘at risk’ nations. Outlining SO

Omicron: Maharashtra revises travel guidelines

A day after the union health secretary wrote to it that its order on SOPs for air travellers was in divergence with guidelines issued by the MoHFW, GoI in view of the Omicron threat, the Maharashtra government on Thursday revised its guidelines for passengers arriving in the state. Issuing

Omicron: Centre asks Maharashtra to follow uniform guidelines

With the threat of Omicron, the new variant of the coronavirus, looming large, the union health ministry has written to the Maharashtra government to align orders issued by the state with the ministry’s guidelines for uniform implementation. The state government in its order dated Nove

Central Railways runs over 800 Kisan Railway trips

To ensure bigger access to farm produce and provide new markets with quick transportation and subsidy at 50%, the Kisan Rail has been bringing prosperity, joy, and hope to farmers of Maharashtra. On November 28, the Central Railway ran its 800th  trip of Kisan Rail from Sangola to Muzaffarpur.

Visionary Talks: Dr. Naresh Trehan, CMD Medanta Heart Institute with Kailashnath Adhikari



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter