Privatisation of Air India is difficult, says NITI VC Arvind Panagariya

NITI has put forward its proposals on Air India sale, govt to take a call post writing off its debts

It is very difficult to privatise Air India without the government writing off some of its debts, NITI Aayog Vice-chairman Arvind Panagariya said. 

The vice-chairman said the Aayog has put forward all its proposals on Air India sale; now it is up to the government to take a call as to whether it wants to divest in Air India or not. 

If yes, then what happens to the debt, which is expected to be over Rs 52,000 crore. 

Then whether it wants to sell to domestic buyers or foreign ones. "All these issues will now have to be addressed by the government," Panagariya said.

"Selling it with the current existing debt is going to be very, very difficult even if the sale is open to both domestic and foreign buyers. So, something will need to be done on the debt issue," he said. 

The government, in fact, is looking at recasting the debt. Sources said the aim was to restructure working-capital loans in return for assets and land. Air India has been lent working capital by a consortium of 25 banks, led by the State Bank of India.