Business

Govt open to 100% stake sale in Air India

New Delhi, Jul 7 (Agencies) | Publish Date: 7/7/2019 12:04:24 PM IST

New Delhi: There are indications that the government may completely exit loss-making Air India during the sell-off process. However, a final call will be taken by a panel of ministers, a top official on Saturday hinted.

“A general feeling (in the government) is that if people want to have full (control), let them have it. But I will be able to tell you only when a specific decision is taken. My personal view is that I do not see any conflict for the government,” department of investment and public asset management (DIPAM) secretary Atanu Chakraborty said.

It may be noted that the recently, government restarted the process to sell debt-laden Air India after putting it on hold last year owing to poor response. 

Volatility in global crude prices was cited as the reason. According to the national daily, when Niti Aayog had proposed the sale of the entire stake, the government had offered 74 per cent stake to a strategic investor, which was seen as one of the reasons for low-interest level.

Chakraborty said, “We would now like to do it much faster, having done most of the paperwork.” 

“My understanding is that FDI in aviation is 100%. The cap is again on substantial ownership and effective control (SOEC) guidelines, which is 49% and certain directorships. The second cap is on Air India as a nationally owned carrier. Once it is not nationally owned it will go through 100% so that’s a signal in the budget. SOEC is much more complicated because there is some reciprocity, there are a lot of issues involved that the budget does not mention. That’s an issue which needs to be grappled with,” the secretary said.

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