The United Progress Alliance (UPA) government had finalised a plan to privatise Air India five years ago, but it did not take off as the then Finance Minister, Pranab Mukherjee, vetoed it. Today, the ruling National Democratic Alliance (NDA) government is non-committal on privatising the debt-ridden airline.
The privatisation proposal came on October 28, 2011, when a Group of Ministers in the UPA government sat down to decide Air India’s fate and approve a bailout package for the carrier. Some Cabinet Ministers favoured the plan, based on recommendations made by a group of bureaucrats. Mr. Mukherjee as Finance Minister rejected the idea, on the ground that privatising Air India was beyond the mandate of the GoM, according to documents obtained under the Right to Information (RTI) Act and reviewed by The Hindu. The October 2011 recommendations in the turnaround plan and financial restructuring plan were submitted by a group of officers of the Union Finance Ministry, after a spell of continuous losses. “Once Air India is able to achieve an appropriate level of growth rate, divesting the airlines to a strategic partner could be considered,” the group said, in a recommendation to the GoM on Civil Aviation headed by Mr. Mukherjee in October 2011. “Going by the Terms of Reference of the GoM, closing down or privatisation of Air India were not the options available,” Mr. Mukherjee said, accepting all recommendations other than the one on privatisation. The roadmap in the turnaround plan could be implemented, he said. However, Petroleum Minister S. Jaipal Reddy differed, and said “the airline needs to confront reality,” suggesting that the privatisation option should be retained. “As regards privatisation of airline, while today there are no takers, some day a view must be taken that beyond a point it is no longer possible to support the airline further A hard view and harsh measures need to be taken to reform the airline and those should not exclude privatisation,” he said.
The privatisation proposal came on October 28, 2011, when a Group of Ministers in the UPA government sat down to decide Air India’s fate and approve a bailout package for the carrier. Some Cabinet Ministers favoured the plan, based on recommendations made by a group of bureaucrats. Mr. Mukherjee as Finance Minister rejected the idea, on the ground that privatising Air India was beyond the mandate of the GoM, according to documents obtained under the Right to Information (RTI) Act and reviewed by The Hindu. The October 2011 recommendations in the turnaround plan and financial restructuring plan were submitted by a group of officers of the Union Finance Ministry, after a spell of continuous losses. “Once Air India is able to achieve an appropriate level of growth rate, divesting the airlines to a strategic partner could be considered,” the group said, in a recommendation to the GoM on Civil Aviation headed by Mr. Mukherjee in October 2011. “Going by the Terms of Reference of the GoM, closing down or privatisation of Air India were not the options available,” Mr. Mukherjee said, accepting all recommendations other than the one on privatisation. The roadmap in the turnaround plan could be implemented, he said. However, Petroleum Minister S. Jaipal Reddy differed, and said “the airline needs to confront reality,” suggesting that the privatisation option should be retained. “As regards privatisation of airline, while today there are no takers, some day a view must be taken that beyond a point it is no longer possible to support the airline further A hard view and harsh measures need to be taken to reform the airline and those should not exclude privatisation,” he said.
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