Government infused ₹62,057 crore into Air India SPV to facilitate sale
Premium- FM said that e-Passports using embedded chip and futuristic technology will be rolled out in 2022-23
The government made an allocation of ₹62,057 crore into a special purpose vehicle (SPV), Air India Asset Holding Ltd (AIAHL), to house a majority of Air India’s debt, besides ₹1,944 crore to Air India to cover all losses made during the pandemic to clear the liabilities of the national carrier before handing it over to Tata Group, showed budget documents released on Tuesday.
According to revised estimates of the budget for FY22, AIAHL has received equity infusion of ₹62,057 crore, including ₹36,254 crore for repayment of government guaranteed borrowings for Air India Ltd, ₹12,357 crore for repayment of borrowings for sale and leaseback rentals for aircraft; and ₹13,446 crore for repayment of other dues and liabilities. The grants in aid to Air India for cash losses during the pandemic was ₹1,944 crore.
The Tata group, through its subsidiary, Talace Pvt. Ltd, had submitted a winning bid of ₹18,000 crore against the reserve price of ₹12,906 crore. The bid included a payment of ₹2,700 crore while retaining a debt of ₹15,300 crore.
The divestment of the national carrier was concluded on 27 January with the Centre completing the handover of Air India, and its subsidiaries, Air India Express and AISATS (a 50% stake), to the Tata group.
On 31 August 2021, Air India had total debt of ₹61,562 crore. The total debt of the airline at the end of the recently concluded December quarter is not yet available in public domain.
The union budget 2022-23 also allocated ₹600 crore towards reinvigorating the regional connectivity scheme (RCS). “The proposal is for revival of 20 airports and for commencement of 90 RCS routes, viability gap funding for North East connectivity. A new scheme has also been formulated for providing aviation infrastructure to improve connectivity in NE region," said the Notes on Demands for Grants, 2022-2023.
The budget for FY23 allocated ₹10,667 crore for the civil aviation ministry, up from ₹3,224 crore in FY22. Total allocations for FY22 in the revised estimates, however, stood at ₹72,652 crore, primarily due to the expenses incurred for the sale of Air India.
Finance minister Nirmala Sitharaman also said that e-Passports using embedded chip and futuristic technology will be rolled out in 2022-23 to enhance convenience for citizens during overseas travel.
“We welcome the new incentives of issuing of e-passport and introduction of digital currency," said Ronojoy Dutta, CEO, IndiGo. “But, we were expecting tax concession to aviation industry in the forms of cut in ATF excise duty and allocation of concessional finance to airlines to help us come out of the pandemic."
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