While presenting the Union Budget on Monday, Finance Minister Nirmala Sitharaman said that the Centre has allocated Rs 2,268 crore for a special purpose vehicle set up as part of financial restructuring of Air India
During her budget speech on Monday, Finance Minister Nirmala Sitharaman announced that disinvestment of Air India will be completed in 2021-22 and said that the Centre has allocated Rs 2,268 crore for a special purpose vehicle set up as part of financial restructuring of the debt-laden national carrier.
The finance minister also proposed tax exemption for aircraft leasing companies.
Air India is currently under disinvestment process. Multiple entities submitted their expression of interests (EOIs) for the carrier last month. The government is likely to reveal the names of qualified bidders in the coming weeks.
Air India Asset Holding Ltd, a special purpose vehicle (SPV), has been set up as part of financial restructuring of the debt-laden national carrier. According to documents presented in the Budget for 2021-22, Rs 2,268 crore has been allocated for the SPV for the next financial year.
Sitharaman said that disinvestment of Air India and Pawan Hans would be completed in 2021-22.
In the Union Budget for 2021-22, the Ministry of Civil Aviation has been allocated Rs 3,224 crore, which is 22 per cent lower than Rs 4,131 crore that was allocated for the current fiscal. The budget last year had allocated Rs 3,797 crore to the ministry for 2020-21, but in revised estimates it was increased to Rs 4,131 crore.
The government on Monday allocated Rs 600 crore, 14.28 per cent lower than the current fiscal, to its regional connectivity scheme ‘Udan’ for 2021-22.
Under the Udan scheme, financial incentives from the Centre, state governments and airport operators are extended to selected airlines to encourage operations from unserved and under-served airports, and keep airfares affordable.
Sitharaman said in her speech that the government would be monetising assets of the AAI-operated airports in tier-2 and tier-3 cities to raise money for building new infrastructure.
The Airports Authority of India (AAI), which works under the Civil Aviation Ministry, owns and operates around 100 airports in India.
(With PTI inputs)