Tax payers will be paying a total of ₹62,000 crore for debt and other liabilities of Air India, according to the Supplementary Demand for Grants tabled before Parliament on Friday.
The government has sought Parliament’s nod to infuse over ₹62,000 crore to its company that holds Air India’s debt, liabilities and some non-core assets. This company was set up to to clean the airline’s balance sheet ahead of its privatisation and to make it attractive to buyers.
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At a press conference in October, DIPAM Secretary, Tuhin K. Pandey had said the net liability on the government after Air India's privatisation amounted to ₹28,844 crore. So, what is the balance ₹33,105 crore for?
“The amount includes interest liabilities toward working capital and aircraft loans, lease rentals, owings to oil companies and to Airports Authority of India. This is what the government has provided for in the supplementary demand for grants,” a source close to the developments said.
As of August 31, Air India had a total debt of ₹61,562 crore. Of the total amount, Tata Son’s subsidiary Talace will take over ₹15,300 crore. The remaining ₹46,262 crore will be transferred to a government-owned special purpose vehicle known as Air India Assets Holding Limited. This company, which was set up to clean the national carrier’s balance sheet, also houses non-core assets such as land and buildings worth ₹14,718 crore.
Since 2018, the government has already budgeted Rs 8,351 crore for servicing some of the liabilities parked in this SPV.
