The funds, promised in the last budget, were meant to shore-up the airlines' balance sheets as a precursor to government disinvestment.

For the coming fiscal, the budget has provided a token amount of Rs 1 lakh each for the state-owned IA and AI.

However, Indian Airlines, which has been awaiting the Rs 125 crore bail-out package the whole year, chose to play down the Government decision.IA chairman & managing director Anil Baijal told The Financial Express "We have been told that the promised equity is tied-up to the acquisition of new aircraft by IA. The funds will be given to us whenever our plans are ready for acquiring new aircraft".

Baijal stressed that the Government had not aborted the Rs 125 crore equity infusion in IA. The Centre will provide the funds when IA is ready with its aircraft purchase plans. The domesticcarrier is expected firm-up these plans in another six to eight months.

"The proposal of inducting Rs 125 crore will be put-up to the Cabinet soon and we will get the money whenever we order the aircraft. We were also promised a token equity of Rs 5 crore to indicate the Government's good intentions" Baijal said. With just a month to go before the end of the current fiscal, the Rs 5 crore token equity may not be forthcoming. Incidentally, the Budget 1999-2000 does not mention any budgetary support for IA and AI in the revised estimates of 1998-99.

Baijal's views were echoed by officials of the civil avaition ministry. "There is no re-think on the IA equity induction. The only factor which is holding back the funds is that is that IA's plans for aircraft purchase are not finalised yet" said top-level sources in the ministry.