Govt to keep flying Air India, MTNL ready with revival plan

Both the companies had come under sick units list but the govt is keen to retain its air business

GN Bureau | March 12, 2015


#air india   #mtnl   #psu   #aviation   #telecom  

The civil aviation ministry has that there was no question of closing Air India. Minister of Heavy Industries Anant Geete had said in a written reply to the Lok Sabha that Air India and MTNL were among the many state companies "termed as a sick public sector unit". It raised questions as to whether the government was planning to close such sick PSUs.

Minister of State for Civil Aviation Mahesh Sharma has said it was important to have a flag carrier in the country. Sharma said that the government was committed to pumping in the allocated funds in Air India as part of its turnaround and financial restructuring plan, approved by the then UPA dispensation in 2012.

The government, however, has been trimming the budgetary support to Air India, pushing the airline to hasten towards breaking even.  The government has already pumped Rs 18,400 crore in equity for AI. As part of the restructuring plan in 2012, the government had agreed to put in Rs 30,000 crore as equity till 2020-21 or for a nine-year period.

Meanwhile, Mahanagar Telephone Nigam (MTNL), now in the list of ‘sick’ public sector units (PSUs), has sent a revival proposal to the department of telecommunications (DoT). It has been making operational losses for three years.

According to reports the proposal of the telecom PSU is under consideration. The PSU plans to raise Rs 500 crore through a short-term loan in the next financial year for expansion. Overall, an amount of Rs 805 crore will go towards capital expenditure — for network upgradation and enhancing data services — in 2015-16.

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