1. Par panel for full restoration of equity infusion to Air India

Par panel for full restoration of equity infusion to Air India

Recommending restoration of full amount of equity infusion of Rs 3,901.49 crore in Air India for this fiscal as sought by it, a parliamentary panel...

By: | New Delhi | Published: April 29, 2016 8:21 PM
air india, air india economy class, air india business class, air india neos, air india news The government had infused Rs 3,300 crores in Air India last fiscal against its demand for Rs 4,277 crores, including compensation sought for the impact of exchange rate variation, interest paid, among others. (Reuters)

Recommending restoration of full amount of equity infusion of Rs 3,901.49 crore in Air India for this fiscal as sought by it, a parliamentary panel today said a shortfall in funding could adversely impact the national carrier’s financial and operational performance.

The government, as part of its Rs 30,231-crore bailout package under Air India’s Turn Around Plan(TAP) or Financial Restructuring Plan (FRP), has allocated Rs 1,713 crore to the airline against a request for Rs 3,901.49 crore this fiscal.

However, as per the TAP (or FRP), the amount of equity infusion for Air India for the current fiscal was slated at Rs 3,016 crore.

“As against this amount, Air India had requested for an equity infusion of Rs 3,901.49 crores. The difference is primarily on account of the carry forward of the shortfall in equity infusion up to FY16 amounting to Rs 977 crores,” the department-related Parliamentary Standing Committee on Transport, Tourism and Culture, headed by TMC MP K D Singh, said in its report tabled in Parliament today.

The government had infused Rs 3,300 crores in Air India last fiscal against its demand for Rs 4,277 crores, including compensation sought for the impact of exchange rate variation, interest paid, among others.

“The committee finds that the fund allocation committed for 2016-17 as per TAP has not been provided for Air India,” it said.

Stating that there was a deficit of Rs 977 crore in equity infusion in the carrier last fiscal also, the report added “the committee feels that this reduction in equity infusion might adversely affect the financial and operational performance of the company since it may be forced to take loans from banks and financial institutions at a higher interest rate to meet the short fall, which was not contemplated under the Financial Restructuring Plan.”

“The committee, therefore, is of the considered view that such shortfall, at this stage when the company is presently placed at a critical position in achieving the TAP targets, should be avoided,” the report stated.

Since the committed financial support from the government is vital to sustain the momentum of performance of Air India, the committee strongly recommends that the full amount of equity infusion should be restored to Air India, it said.

The panel, in its report, also recommended that the issue of restoration of full equity infusion amount may be taken up with the Finance Ministry.

Tags: Air India
  1. B
    bemanmahannation Mahan
    Apr 29, 2016 at 5:57 pm
    Modi is quit gullible , I thing there is no other way, as he has to trust his henchmen, who are quite unlike modi. Modi can give vision but who will lead the mission ? Air India needs independent CAG body to see where will infused money go. Money going into higher executive , pilots and engineers who are cripping in spite of getting 6lakh/per month or 3lakh/month.Air India is degeneration very fast into haphazard governance. Modi vision of biometric , e-office has gone into dustbin. audit and vigilance is frowned upon as hindrance, which will lead to unbridled misuse of financial power by department . There is no improvement whatsoever. Only that modi and lohani had been lucky for large dip inoil prices, any upswing of oil prices will bring gloom of flights not meeting its cost back to haunt the tax player ,as government cares a about public money going into drain without any control and supervision.Air India is a gold mine, only it needs is a good management. and motivated executive besides being no-educated cheats. Employees aspirations have taken flight but without delivery ofgrievance redressal they soon will be getting depressed and hopeless .God redeem Air India , the mirror image of India, from corruption ,collusion and connivance .
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