Union Cabinet recently approved the disinvestment plan for Air India and its five subsidiaries. It is seen as one of the boldest reforms by the Government till date. It is being hoped that the decision will attract a positive response and will revive Air India which is otherwise ailing under a burden of huge debt and inefficiency.
Need of disinvestment
The carrier has already been surviving on a bailout package. Last month, the NITI Aayog in its report had recommended the disinvestment of Air India therefore, the decision is very much in sync with NITI Aayog’s view. This decision does convey to the investors that India is serious about reforms and will not throw good money into something not working out well.
Solution adopted by Government
Government money can be much better utilized to fund important social and infrastructure programmes that are actually in need of capital every year.
Factors to consider while disinvestment
The need of the hour is a good evaluation of Air India’s balance sheet and a practical plan to make the public-sector carrier attractive to any prospective buyer, whether foreign or domestic.
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