Disinvestment in India

‘Centre to invite initial bids for Air India in a couple of weeks’

Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Reason behind the divestment of the Air India.


News

Important statement by the Civil Aviation Ministry

  1. The Ministry is engaged in the “important task” of finding buyers for Air India and its subsidiaries as well as for Pawan Hans
  2. The officials(of the ministry) are expecting the expressions of interest to be issued within a couple of weeks

Background

  1. The announcement came in the backdrop of the government paving the way for a stake sale in the debt-laden airline last year
  2. The Union Cabinet had in-principle approved divestment in Air India and the government followed it up by permitting foreign airlines to invest up to 49%, under the approval route, subject to certain conditions

Reason behind the divestment of the Air India

  1. With divestment, the focus is to leverage and monetise AAI’s balance sheet and facilitate a manifold increase in its spend, from the existing Rs. 3,000 crore annually
  2. The AAI proposes to spend Rs. 18,000 crore over four years on upgrading of airports
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