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Government allocates Rs 6,500 crore for Air India

Friday, 11 July 2014 - 7:15am IST | Agency: dna

The government on Thursday announced an equity infusion of Rs6,500 crore for cash strapped national carrier – Air India, while the overall amount set aside for the civil aviation ministry is Rs9,474 crore for the current fiscal.

There has been a total increase in the overall budget for the civil aviation ministry by 11.4% this fiscal, compared to Rs8,502 crore provided to it in the last fiscal.

The government has earmarked Rs6,500 crore for equity infusion in Air India and a plan allocation of Rs569 crore, taking the total allocation to the state-owned air carrier to Rs7,069 crore.

The amount allocated to Air India is higher compared to last year, which saw an infusion of Rs6,000 crore, but lower than the expected Rs7,000 crore.

The airline has remained in losses for the past few years and there have been talks about privatising it. Center of Asia Pacific of Aviantion (CAPA) recommends that a council for the future of Air India be set?up with the objective of establishing a plan within 6?9 months, which outlines the circumstances under which the privatisation would be possible and the structure of the privatisation model.

Air India reported a loss of $720?750 million in 2013-14, down almost 40% from two years ago, as per CAPA estimates.

Meanwhile, the Airport Authority of India (AAI) has been provided with budgetary support of Rs79.70 crore, out of which Rs22 crore has been earmarked for its project at Pakyong, Sikkim.

"Despite an increase in air connectivity, air travel is still out of reach of a large number of aspirational Indians, said finance minister Arun Jaitley.

"Scheme for development of new airports in Tier I and Tier II will be launched for implementation through AAI or PPPs," Jaitley added.

The Directorate General of Civil Aviation has been given a budgetary support of Rs50 crore to pursue their schemes and Rs40 crore was allocated for Bureau of Civil Aviation to pursue their plan schemes.

—(with inputs from PTI)

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